UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 10-Q

 

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

1934 For the quarterly period ended: January 31,April 30, 2023

 

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE EXCHANGE ACT

ACT For the transition period from ________ to ________

 

Commission File Number: 000-54439

 

HARTFORD GREAT HEALTH CORP.

(Exact Name of Registrant as Specified in its Charter)

 

Nevada

(State or other jurisdiction of incorporation or organization)

 

51-0675116

(I.R.S. Employer Identification Number)

 

8832 Glendon Way, Rosemead, California 91770

(Address of Principal Executive Offices) (Zip Code)

 

Registrant’s telephone number including area code: (626)321-1915

 

 

Former name, former address, and former fiscal year, if changed since last report

 

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

 

Indicate by check mark whether the registrant has submitted electronically, every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

 

Indicate by checkmark whether the registrant is a large accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

 

Large accelerated filer ☐Accelerated filer ☐
Non-accelerated filerSmaller reporting company
Emerging growth company  

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.

 

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No

 

Securities registered pursuant to Section 12(b) of the Act:

 

Title of each class Trading Symbol(s) Name of each exchange on which registered
Common stock, par value $0.001 par value HFUS OTC Markets Group

 

State the number of shares outstanding of each of the issuer’s classes of common equity, as of the latest practicable date: 100,108,000 shares of common stock outstanding as of March 17,May 27, 2023.

 

 

 

 

Index

 

  Page
Part I - FINANCIAL INFORMATION 
   
Item 1.Unaudited Consolidated Financial Statements 
 Condensed Consolidated Balance Sheets as of January 31,April 30, 2023 (unaudited) and July 31, 20223
 Condensed Consolidated Statements of Operations (unaudited) for the three and sixnine months ended January 31,April 30, 2023 and 20224
 Condensed Consolidated Statements of Comprehensive Income (Loss) (unaudited) for the three and sixnine months ended January 31,April 30, 2023 and 20225
 Condensed Consolidated Statements of Changes in Stockholders’ Equity (Deficit) (unaudited)6
 Condensed Consolidated Statements of Cash Flows (unaudited) for the sixnine months ended January 31,April 30, 2023 and 20227
 Notes to Condensed Consolidated Financial Statements (unaudited)8
   
Item 2.Management’s Discussion and Analysis or Plan of Operation17
   
Item 3.Quantitative and Qualitative Disclosures About Market Risk21
   
Item 4.Controls and Procedures21
   
Part II - OTHER INFORMATION 
   
Item 1.Legal Proceedings22
   
Item 1A.Risk Factors22
   
Item 2.Unregistered Sales of Equity Securities and Use of Proceeds22
   
Item 3.Defaults Upon Senior Securities22
   
Item 4.Mine Safety Disclosures22
   
Item 5.Other Information22
   
Item 6.Exhibits22
   
SIGNATURES23

 

2

HARTFORD GREAT HEALTH CORP.

CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)

 April 30, 2023  July 31, 2022 
 January 31, 2023 July 31, 2022  (Unaudited)    
ASSETS              
Current Assets                
Cash and cash equivalents $10,575  $15,227  $15,569  $15,227 
Prepaid and Other current receivables  296   1,154   289   1,154 
Related party receivable  62,169   14,233   60,774   14,233 
Current assets held for sale  -   784,113   -   4,499,736 
Total Current Assets  73,040   814,727   76,632   4,530,350 
Non-current Assets                
Equipment, net  7,994   8,006 
Non-current assets held for sale  -   3,715,623 
Property and equipment, net  7,812   8,006 
Total Non-current Assets  7,994   3,723,629   7,812   8,006 
TOTAL ASSETS $81,034  $4,538,356  $84,444  $4,538,356 
                
LIABILITIES AND STOCKHOLDERS’ EQUITY                
Current Liabilities                
Related party loan and payables $4,608,765  $4,481,524  $4,543,433  $4,481,524 
Other current payable  137,762   144,760   134,623   144,760 
Current liabilities held for sale  -   3,840,635   -   6,344,721 
Total Current Liabilities  4,746,527   8,466,919   4,678,056   10,971,005 
Long-term liabilities held for sale  -   2,504,086 
TOTAL LIABILITIES  4,746,527   10,971,005   4,678,056   10,971,005 
Commitments and contingencies (Note 5)  -   -   -   - 
Stockholders’ Equity (Deficit)                
Preferred stock - $0.001 par value, 5,000,000 shares authorized,        
no shares issued and outstanding  -   - 
Preferred stock - $0.001 par value, 5,000,000 shares authorized, no shares issued and outstanding  -   - 
Common stock - $0.001 par value, 300,000,000 shares authorized,        
100,108,000 shares outstanding at both of January 31, 2023 and July 31, 2022.  100,108   100,108 
Common stock - $0.001 par value, 300,000,000 shares authorized, 100,108,000 shares outstanding at both of January 31, 2023 and July 31, 2022.  100,108   100,108 
Preferred stock - $0.001 par value, 5,000,000 shares authorized, no shares issued and outstanding  -   - 
Common stock - $0.001 par value, 300,000,000 shares authorized, 100,108,000 shares outstanding at both of April 30, 2023 and July 31, 2022.  100,108   100,108 
Additional paid-in capital  2,173,521   2,173,521   2,173,521   2,173,521 
Accumulated deficit  (6,945,669)  (7,400,620)  (6,971,862)  (7,400,620)
Accumulated other comprehensive loss  6,547   (16,742)  104,621   (16,742)
Noncontrolling interest  -   (1,288,916)  -   (1,288,916)
Total Stockholders’ Deficit  (4,665,493)  (6,432,649)  (4,593,612)  (6,432,649)
TOTAL LIABILITIES AND STOCKHOLDERS’ DEFICIT $81,034  $4,538,356  $84,444  $4,538,356 

 

The accompanying notes are an integral part of these condensed consolidated unaudited financial statements.

3

HARTFORD GREAT HEALTH CORP.

CONDENSEDCONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)

 2023 2022 2023 2022  2023  2022 2023 2022 
 Three months ended Six months ended  Three months ended Nine months ended 
 January 31, January 31,  April 30, April 30, 
 2023 2022 2023 2022  2023  2022 2023 2022 
Operating expenses                                
Selling, general and administrative  21,362   49,157   76,010   104,667   21,417   38,655   97,427   143,322 
Operating Loss  (21,362)  (49,157)  (76,010)  (104,667)  (21,417)  (38,655)  (97,427)  (143,322)
Other Income (Expense)                                
Interest (expense), net  (4,089)  (2,747)  (8,178)  (5,208)  (4,776)  (3,079)  (12,954)  (8,287)
Gain on disposal of subsidiary  -   -   539,230   -   -   -   539,230   - 
Other income (expense), net  -   -   (91)  140   -   -   (91)  140 
Other income (expense), net  (4,089)  (2,747)  530,961   (5,068)
Income (loss) before income taxes  (25,451)  (51,904)  454,951   (109,735)
Other (expense) income, net  (4,776)  (3,079)  526,185   (8,147)
(Loss) income before income taxes  (26,193)  (41,734)  428,758   (151,469)
Income Tax Expense  -   -   -   -   -   800   -   800 
Net income (loss) from continuing operations  (25,451)  (51,904)  454,951   (109,735)
Net loss from discontinued operations, net of tax  -   (531,293)  -   (1,121,622)
Net (loss) income from continuing operations  (26,193)  (42,534)  428,758   (152,269)
Loss from discontinued operations, net of tax  -   (400,822)  -   (1,522,444)
Net (loss) income  (25,451)  (583,197)  454,951   (1,231,357)  (26,193)  (443,356)  428,758   (1,674,713)
Less: net loss attributable to noncontrolling Interest from discontinued operations  -   (63,099)  -   (129,727)  -   (48,090)  -   (177,817)
Net (loss) income attributable to Hartford Great Health Corp $(25,451) $(520,098) $454,951  $(1,101,630) $(26,193) $(395,266) $428,758  $(1,496,896)
Amounts attributable to Hartford Great Health Corp:                                
Continuing operations  (25,451)  (51,904)  454,951   (109,735)  (26,193)  (42,534)  428,758   (152,269)
Discontinued operations  -   (468,194)  -   (991,895)  -   (352,732)  -   (1,344,627)
Net income (loss) attributable to Hartford Great Health Corp $(25,451) $(520,098) $454,951  $(1,101,630)
Net (loss) income attributable to Hartford Great Health Corp $(26,193) $(395,266) $428,758  $(1,496,896)
                                
Net (loss) income per share from continuing operations attributable to Hartford Great Health Corp $(0.00) $(0.00) $0.00  $(0.00) $(0.00) $(0.00) $0.00  $(0.00)
Net (loss) income per share from discontinued operations attributable to Hartford Great Health Corp $-  $(0.00) $-  $(0.01) $-  $(0.00) $-  $(0.01)
Net loss per common share:                
Basic and Diluted $(0.00) $(0.00) $0.00  $(0.01)
Weighted average shares outstanding:                                
Basic and diluted  100,108,000   100,108,000   100,108,000   100,108,000   100,108,000   100,108,000   100,108,000   100,108,000 

 

The accompanying notes are an integral part of these condensed consolidated unaudited financial statements.

4

HARTFORD GREAT HEALTH CORP.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (UNAUDITED)

 2023  2022  2023  2022  2023  2022 2023 2022 
 Three months ended Six months ended  Three months ended  Nine months ended 
 January 31, January 31,  April 30, April 30, 
 2023  2022  2023  2022  2023  2022 2023 2022 
Net income (loss) $(25,451) $(520,098) $454,951  $(1,101,630)
Net (loss) income $(26,193) $(395,266) $428,758  $(1,496,896)
Other Comprehensive income (loss), net of income tax                                
Foreign currency translation adjustments  (322,644)  (39,047)  23,289   (85,615)  98,074   242,246   121,363   156,631 
Total other comprehensive loss  (322,644)  (39,047)  23,289   (85,615)  98,074   242,246   121,363   156,631 
Less: total other comprehensive loss attributable to noncontrolling interest  -   (7,001)  -   (16,094)  -   44,999   -   28,905 
Total Other Comprehensive Loss Attributable to Hartford Great Health Corp  (322,644)  (32,046)  23,289   (69,521)  98,074   197,247   121,363   127,726 
Total Comprehensive Loss $(348,095) $(552,144) $478,240  $(1,171,151)
Total Comprehensive (Income) Loss $71,881  $(198,019) $550,121  $(1,369,170)

The accompanying notes are an integral part of these condensed consolidated unaudited financial statements.

 

5

HARTFORD GREAT HEALTH CORP.

CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS’ EQUITY (DEFICIT)

                      
             Accumulated     Total 
  Common Stock  

Additional

Paid - in

  Accumulated  

Other

Comprehensive

  Noncontrolling  

Stockholders’

Equity

 
  Shares  Amount  Capital  (Deficit)  loss  Interest  (Deficit) 
Balance, July 31, 2022  100,108,000   100,108   2,173,521   (7,400,620)  (16,742)  (1,288,916)  (6,432,649)
Net income from continuing operations  -   -   -   454,951   -   -   454,951 
Disposal of subsidiary  -   -   -   -   -   1,307,586   1,307,586 
Foreign currency translation adjustment from continuing operations  -   -   -   -   23,289   (18,670)  4,619 
Balance, January 31, 2023 (unaudited)  100,108,000   100,108   2,173,521   (6,945,669)  6,547   -   (4,665,493)
  Shares  Amount  Capital  (Deficit)  loss  Interest  (Deficit) 
              Accumulated     Total 
        Additional     Other     Stockholders’ 
  Common Stock  Paid - in  Accumulated  Comprehensive  Noncontrolling  Equity 
  Shares  Amount  Capital  (Deficit)  loss  Interest  (Deficit) 
Balance, July 31, 2022  100,108,000   100,108   2,173,521   (7,400,620)  (16,742)  (1,288,916)  (6,432,649)
Net income (loss) from continuing operations  -   -   -   428,758   -   -   428,758 
Disposal of subsidiary  -   -   -   -   -   1,307,586   1,307,586 
Foreign currency translation adjustment  -   -   -   -   121,363   (18,670)  102,693 
Balance, April 30, 2023 (unaudited)  100,108,000   100,108   2,173,521   (6,971,862)  104,621   -   (4,593,612)

 

         Accumulated   Total          Accumulated   Total 
     Additional   Other   Stockholders’      Additional   Other   Stockholders’ 
 Common Stock Paid - in Accumulated Comprehensive Noncontrolling Equity  Common Stock Paid - in Accumulated Comprehensive Noncontrolling Equity 
 Shares Amount Capital (Deficit) loss Interest (Deficit)  Shares Amount Capital (Deficit) loss Interest (Deficit) 
Balance, July 31, 2021  100,108,000   100,108   2,173,521   (5,821,519)  (233,487)  (1,205,073)  (4,986,450)  100,108,000   100,108   2,173,521   (5,821,519)  (233,487)  (1,205,073)  (4,986,450)
Net (loss) from continuing operations  -   -   -   (109,735)  -   -   (109,735)  -   -   -   (152,269)  -   -   (152,269)
Net (loss) from discontinued operations  -   -   -   (991,895)  -   (129,727)  (1,121,622)  -   -   -   (1,344,627)  -   (177,817)  (1,522,444)
Foreign currency translation adjustment from continuing operations  -   -   -   -   (69,521)  -   (69,521)
Foreign currency translation adjustment from discontinued operations  -   -   -   -   -   (16,094)  (16,094)
Balance, January 31, 2022 (unaudited)  100,108,000   100,108   2,173,521   (6,923,149)  (303,008)  (1,350,894)  (6,303,422)
Investment from noncontrolling interest  -   -   -   -   -   60,528   60,528 
Foreign currency translation adjustment  -   -   -   -   127,726   28,905   156,631 
Balance, April 30, 2022 (unaudited)  100,108,000   100,108   2,173,521   (7,318,415)  (105,761)  (1,293,457)  (6,444,004)

 

The accompanying notes are an integral part of these condensed consolidated unaudited financial statements.

 

6

HARTFORD GREAT HEALTH CORP.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)

 2023 2022       
 Six months ended  Nine months ended 
 January 31,  April 30, 
 2023 2022  2023  2022 
Cash flows from operating activities:                
Net income (loss) $454,951  $(109,735) $428,758   (152,269)
Adjustments to reconcile net income (loss) to net cash used in operating activities:                
Depreciation and amortization  -   - 
Disposal of subsidiaries  (539,230)  -   (539,230)  - 
Changes in operating assets and liabilities:      -         
Prepaid and Other current receivables  827   -   832   - 
Related party receivables and payables  26,955   117,978   33,211   20,476 
Other current payable  (6,631)  4,209   (6,654)  6,065 
Net cash (used in) provided by operating activities from continuing operations  (63,128)  12,452   (83,083)  (125,728)
Net cash used in operating activities from discontinued operations  -   (665,736)  -   (915,303)
Net cash used in operating activities  (63,128)  (653,284)  (83,083)  (1,041,031)
                
Cash flows from investing activities:                
Net cash used in investing activities from continuing operations  -   -   -   - 
Net cash used in investing activities from discontinued operations  -   (174,317)  -   (174,277)
Net cash used in investing activities  -   (174,317)  -   (174,277)
                
Cash flows from financing activities:                
Proceeds of related party notes payable  60,000   80,000   85,000   120,000 
Advances from related parties  -   704,576   -   1,018,395 
Net cash provided by financing activities from continuing operations  60,000   784,576   85,000   1,138,395 
Net cash provided by financing activities from discontinued operations  -   -   -   39,068 
Net cash provided by financing activities  60,000   784,576   85,000   1,177,463 
        
Effect of exchange rate changes on cash from continuing operations  (1,524)  46   (1,575)  (244)
Effect of exchange rate changes on cash from discontinued operations  -   344   -   331 
Net change in Cash, cash equivalents and restricted cash from continuing operations  (4,652)  797,074   342   1,012,423 
Net change in Cash, cash equivalents and restricted cash from discontinued operations  -   (839,709)  -   (1,050,181)
Cash, cash equivalents and restricted cash at beginning of period $15,227  $54,178   15,227   54,178 
Cash, cash equivalents and restricted cash at end of period $10,575  $11,543  $15,569   16,420 
        
Supplemental Cash Flow Information                
Interest paid $-  $-  $-   - 
Income taxes paid $-  $-  $-   - 

The accompanying notes are an integral part of these condensed consolidated unaudited financial statements.

7

HARTFORD GREAT HEALTH CORP.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

 

NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

 

This summary of significant accounting policies is presented to assist in understanding the Company’s financial statements. The financial statements and notes are the responsibility of the Company’s management. These accounting policies conform to accounting principles generally accepted in the United States of America (“US GAAP”) and have been consistently applied in the preparation of the financial statements. This disclosure should be read in conjunction with our audited financial statements for the year ended July 31, 2022, including footnotes, contained in our Annual Report on Form 10-K.

 

Organization

 

Hartford Great Health Corp. was originally incorporated in the State of Nevada on April 2, 2008 under the name PhotoAmigo, Inc. It changed its name to Hartford Great Health Corp. on August 22, 2018 and since then we have been engaged in activities to formulate and implement our business plans.

 

Through its wholly owned subsidiary - Hangzhou Hartford Comprehensive Health Management, Ltd (“HZHF) and HZHF’s 60 percent owned subsidiary - Hangzhou Longjing Qiao Fu Vacation Hotel Co., Ltd. (“HZLJ”), and through Shanghai Hartford Comprehensive Health Management, Ltd. (“HFSH”) and its 90 percent owned subsidiary - Shanghai Qiao Garden International Travel Agency (“Qiao Garden Int’l Travel”), the Company engages in hospitality industry in China. Qiao Garden Int’l Travel was disposed on December 31, 2020.

 

The Company started to engage in early childhood education industry at Hartford International Education Technology Co., Ltd (“HF Int’l Education”). On July 24, 2019 and March 23, 2020, HF Int’l Education established two 100%100% owned subsidiaries, Pudong Haojin Childhood Education Ltd. (“PDHJ”) and Shanghai Hongkou HaiDeFuDe Childcare Co., Ltd.(“HDFD”), respectively, to operate the early childhood education service under the brand name of “HaiDeFuDe” in Shanghai, China. On July 20, 2020, HF Int’l Education entered an agreement with two individuals to acquire the whole ownership of Shanghai Gelinke Childcare Education Center (“Gelinke”). Gelinke temporally ceased its operations by the end of August 2021. On August 31, 2021, PDHJ established one 96%96% owned subsidiary, Shanghai HDFD Zhongli Education Technology Co., Ltd. (“Zhongli”), two individual investors hold the remaining 4%4% ownership.

 

Impacted by the government regulation implemented in education industry and the restrictions posted by the Chinese government to control the pandemic in China since 2021, to avoid further operation losses, on August 1, 2022, HFSH entered a contract with a related party, Shanghai Oversea Chinese Culture Media Ltd. (“SH Oversea”), to sell 90 percent ownership of HF Int’l Education and its subsidiaries for $900 (RMB 5,850). On August 1, 2022, HFUS entered a contract with SH Oversea and another individual, to sell 100 percent ownership of HZHF and its subsidiaries for $1,000 (RMB 6,500). See Note 3 Acquisitions and Disposals.

 

Basis of Presentation

 

The consolidated financial statements include the accounts of Hartford Great Health Corp, its wholly-owned subsidiaries and subsidiaries in which it has a controlling interest. The Company reports noncontrolling interests of the consolidated entities as a component of equity separate from the Company’s equity. All material inter-company transactions between and among the Company and its consolidated subsidiaries have been eliminated in the consolidation. The Company’s net income (loss) excludes income (loss) attributable to the noncontrolling interests.

 

Use of Estimates

 

The preparation of financial statements in conformity with US GAAP requires the Company’s management to make estimates and assumptions that affect the amounts of assets and liabilities, the identification and disclosure of impaired assets and contingent liabilities at the date of the financial statements, and the reported amounts of expenses during the reporting period. Actual results could differ from those estimates.

 

Reclassifications

 

Certain amounts on the prior-year consolidated balance sheet, consolidated statement of operations and cash flows were reclassified to conform to current-year presentation, with no effect on ending stockholders’ equity.

 

8

 

Income Taxes

The Company accounts for income taxes using the asset and liability method in accordance with ASC 740, Accounting for Income Taxes. The asset and liability method provides that deferred tax assets and liabilities are recognized for the expected future tax consequences of temporary differences between the financial reporting and tax bases of assets and liabilities, and for operating loss and tax credit carry forwards. Deferred tax assets and liabilities are measured using the currently enacted tax rates and laws that will be in effect when the differences are expected to reverse. The Company records a valuation allowance to reduce deferred tax assets to the amount that is believed more likely than not to be realized.

 

The Tax Reform Act permanently reduces the U.S. corporate income tax rate to a flat 21% rate, effective January 1, 2018. In addition, the 2017 Tax Act also creates a new requirement that certain income (i.e., Global Intangible Low-Taxed Income (“GILTI”)) earned by controlled foreign corporations (“CFCs”) must be included in the gross income of the CFCs’ U.S. shareholder income. The tax law in PRC applies an income tax rate of 25% to all enterprises. The Company’s subsidiary does not receive any preferential tax treatment from local government. The Company has been in loss position for years and zero amount of tax provisions, including GILTI. Deferred tax assets as of the reporting periods ended were fully reserved for valuation allowance as they are more likely than not to be realized.

 

Revenue Recognition

 

The Company adopted ASC Topic 606 Revenue from Contracts with Customers (“Topic 606) on August 1, 2019, applying the modified retrospective method to all contracts that were not completed as of August 1, 2019. Revenue is recognized when control of promised goods or services is transferred to our customers in an amount of consideration to which we expect to be entitled to in exchange for those goods or services. We follow the five steps approach for revenue recognition under Topic 606: (i) identify the contract(s) with a customer, (ii) identify the performance obligations in the contract, (iii) determine the transaction price, (iv) allocate the transaction price to the performance obligations in the contract, and (v) recognize revenue when (or as) we satisfy a performance obligation. Billings to customers for which services are not rendered are considered deferred revenue. ASC 606 has no material impacts on the Company’s financial positions. The Company’s revenue is recognized when it satisfies a single performance obligation by transferring control of its products or providing services to a customer. The Company’s general payment terms are short-term in duration. The Company does not have significant financing components or payment terms.

 

 a.Early childhood education services: HF Int’l Education generates revenue from childhood education classes provided to its customers. The educational services consist of parent-child and bilingual childcare classes. Each contract of educational classes is accounted for as a single performance obligation which is satisfied proportionately over the service period. Tuition fee is generally collected in advance and is initially recorded as deferred revenue and transferred to contract liabilities after trial period. Refunds are provided to parents if they decide within the trial period that they no longer want to take the class. After the trial period, if a parent withdraws from a class, usually only that unearned portion of the fee is available to be returned. Nil of revenue has been generated during the three and sixnine months ended January 31,April 30, 2023. For the three and sixnine months ended January 31,April 30, 2022, $169,548151,930 and $324,912476,842, respectively, of revenue were derived from early childhood education classes provided.
 b.Hospitality services: HZLJ generates revenue primarily from the room rentals, sale of food and beverage and other miscellaneous hospitality services. The Company recognizes room rental and services daily as services are provided. Under ASC 606, the pattern and timing of recognition of income from hotel facility is consistent with the prior accounting model.

 

Impacted by the Covid-19 pandemic and Chinese regulation on education industry, both early childhood education services and hospitality services have been sold on August 1 2022. Thus, there was no revenue recognized from the two-revenue-stream for the six-monthnine-month ended January 31,April 30, 2023. See Note 3 Acquisitions and Disposals.

 

9

Recent Accounting Pronouncements.

 

Recently issued accounting pronouncements not yet adopted

 

In June 2016, the FASB issued ASU 2016-13, “Financial Instruments—Credit Losses”. The standard, including subsequently issued amendments (ASU 2018-19, ASU 2019-04, ASU 2019-05, ASU 2019-10 and ASU 2019-11), requires a financial asset measured at amortized cost basis, such as accounts receivable and certain other financial assets, to be presented at the net amount expected to be collected based on relevant information about past events, including historical experience, current conditions, and reasonable and supportable forecasts that affect the collectability of the reported amount. In November 2019, the FASB issued ASU No. 2019-10 to postpone the effective date of ASU No. 2016-13 for public business entities eligible to be smaller reporting companies defined by the SEC to fiscal years beginning after December 15, 2022, including interim periods within those fiscal years. The Company is evaluating the impact of this guidance on its consolidated financial statements.

NOTE 2. GOING CONCERN

 

The accompanying financial statements were prepared on a going concern basis, which contemplates the realization of assets and the satisfaction of obligations in the normal course of business. However, Hartford Great Health Corp. has incurred losses since inception, resulting in an accumulated deficit of $6,945,6696,971,862 as of January 31,April 30, 2023. These conditions raise substantial doubt about the ability of Hartford Great Health Corp. to continue as a going concern.

 

In view of these matters, continuation as a going concern is dependent upon several factors, including the availability of debt or equity funding upon terms and conditions acceptable to Hartford Great Health Corp., and ultimately achieving profitable operations. Management believes that Hartford Great Health Corp.’s business plan provides it with an opportunity to continue as a going concern. However, management cannot provide assurance that Hartford Great Health Corp. will meet its objectives and be able to continue in operation.

 

The financial statements do not include any adjustments to reflect the possible future effects on the recoverability and classification of assets or the amounts and classification of liabilities that may result from the possible inability of Hartford Great Health Corp. to continue as a going concern.

 

NOTE 3. ACQUISITIONS AND DISPOSALS

 

In January 2019, HFSH entered agreements to acquire 100 percent equity interest of Shanghai Luo Sheng International Trade Ltd. (“SH Luosheng”). On August 1, 2022, HFSH decided to withdraw from the agreement entered in January 2019 to acquire 100 percent equity interest of Shanghai Luo Sheng International Trade Ltd. (“SH Luosheng”). There was no penalty levied or to be levied due to delayed execution or inexecution.

 

Impacted by the government regulation newly implemented in education industry and the restrictions posted by the Chinese government to control the pandemic in China since 2021, the Company’s business hasn’t been developed as planned and occurred significant loss from the early child education practice. To avoid further operation losses, subsequently on August 1, 2022, HFSH entered a contract with a related party, Shanghai Oversea Chinese Culture Media Ltd. (“SH Oversea”), to sell 90 percent ownership of HF Int’l Education and its subsidiaries for $900 (RMB 5,850). On August 1, 2022, HFUS entered a contract with SH Oversea and another individual, to sell 100 percent ownership of HZHF and its subsidiaries for $1,000 (RMB 6,500).

 

10

SCHEDULE OF NET ASSETS (LIABILITIES) DISPOSED OF SUBSIDIARY

Net assets (liabilities) disposed of:   
    
Cash and cash equivalents $4,938 
Prepaid and Other current receivables  45,532 
Related party receivable  428,519 
Inventory  305,124 
Property and equipment - Net  582,707 
ROU assets-Operating lease  2,836,698 
Other assets  296,218 
Related party loan and payables  (1,321,549)
Contract liabilities  (547,906)
Lease liabilities, current and noncurrent  (3,715,688)
Other current payable  (401,782)
Other liabilities  (357,796)
Noncontrolling interest  1,307,586 
Net assets (liabilities) of the subsidiaries, excluding noncontrolling interest  (537,399)
Consideration  1,831 
Gain on disposal of the subsidiaries $(539,230)

 

The total assets and liabilities of Education and hospitality segments that were classified as held for sale on the Company’s consolidated balance sheet as of July 31, 2022 as follows:

 

SCHEDULE OF DISCONTINUED OPERATIONS OF FINANCIAL STATEMENTS

  July 31, 2022 
Assets    
Current Assets    
Cash and cash equivalents $4,938 
Prepaid and Other current receivables  45,532 
Related party receivable  428,519 
Inventory  305,124 
Property and equipment, net  582,707 
ROU assets-operating lease  2,836,698 
Other assets  296,218 
Total Assets held for sale $4,499,736 
Liabilities    
Current Liabilities    
Related party loan and payables $1,321,549 
Contract liabilities  547,906 
Lease liabilities, current and noncurrent  3,715,688 
Other current payable  401,782 
Other liabilities  357,796 
Total Liabilities held for sale $6,344,721 

11

 

The unaudited Pro Forma Condensed Consolidated Financial Statements for the three and sixnine months ended January 31,April 30, 2022 have been derived from the historical unaudited Condensed Consolidated Financial Statements included in the Quarterly Report on Form 10-Q for the quarterly period ended January 31,April 30, 2022 filed with the Securities and Exchange Commission (“SEC”) on March 22,July 7, 2022. The unaudited Pro Forma Condensed Consolidated Financial Statements for the years ended July 31, 2022 and 2021 have been derived from the historical audited Consolidated Financial Statements included in the Annual Report on Form 10-K for the year ended July 31, 2022 filed with the SEC on November 14, 2022. The unaudited Pro Forma Condensed Consolidated Statement of Operations for the three and sixnine months ended January 31,April 30, 2022 and the years ended July 31, 2022 and 2021 give effect to the dispositions as if they had occurred on August 1, 2020, the beginning of the earliest period presented. The unaudited Pro Forma Condensed Consolidated Balance Sheet as of July 31, 2022 gives effect to the dispositions as if they had occurred on July 31, 2022.

 

The unaudited Pro Forma Condensed Consolidated Financial Statements were prepared for illustrative and informational purposes only and are not intended to represent what our results of operations or financial position would have been had the disposition occurred on the dates indicated. The unaudited Pro Forma Condensed Consolidated Financial Statements also should not be considered indicative of our future results of operations or financial position. The actual financial position and results of operations may differ significantly from the pro forma amounts reflected herein due to a variety of factors. The unaudited Pro Forma Condensed Consolidated Financial Information does not reflect the realization of any expected cost savings, synergies, or dis-synergies as a result of the dispositions.

 

The unaudited Pro Forma Condensed Consolidated Financial Statements and accompanying notes should be read in connection with the historical unaudited Condensed Consolidated Financial Statements and accompanying notes for the three and sixnine months ended January 31,April 30, 2022, which are included in the Quarterly Report on Form 10-Q for the quarterly period ended January 31,April 30, 2022, as well as the historical audited Consolidated Financial Statements and accompanying notes as of and for the years ended July 31, 2022 and 2021, which are included in the Annual Report on Form 10-K for the year ended July 31, 2022.

UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS

SCHEDULE OF PRO FORMA INFORMATION 

 Historical Less: Discontinued Operations (a) Pro Forma Continuing Operations  Historical  Less: Discontinued Operations (a) Pro Forma Continuing Operations 
 Historical  Less: Discontinued Operations (a)  Pro Forma Continuing Operations  Historical  Less: Discontinued Operations (a)  Pro Forma Continuing Operations  Three months ended April 30, 2022  Nine months ended April 30, 2022 
 Three months ended January 31, 2022 Six months ended January 31, 2022               
 Historical  Less: Discontinued Operations (a)  Pro Forma Continuing Operations  Historical  Less: Discontinued Operations (a)  Pro Forma Continuing Operations  Historical Less: Discontinued Operations (a) Pro Forma Continuing Operations  Historical  Less: Discontinued Operations (a) Pro Forma Continuing Operations 
Tuition revenue $169,548  $169,548  $-  $324,912  $324,912  $-  $151,930  $151,930  $-  $476,842  $476,842  $- 
Service revenue  17,403   17,403   -   31,851   31,851   -   5,840   5,840   -   37,691   37,691   - 
Total revenue  186,951   186,951   -   356,763   356,763   -   157,770   157,770   -   514,533   514,533   - 
Operating cost and expenses                                                
Cost of tuition revenue  273,697   273,697   -   602,094   602,094   -   264,084   264,084   -   866,178   866,178   - 
Cost of service revenue  7,899   7,899   -   14,506   14,506   -   3,884   3,884   -   18,390   18,390   - 
Cost of revenue  281,596   281,596   -   616,600   616,600   -   267,968   267,968   -   884,568   884,568   - 
Depreciation and amortization  34,791   34,791   -   63,010   63,010   -   27,958   27,958   -   90,968   90,968   - 
Selling, general and administrative  494,168   445,011   49,157   973,708   869,041   104,667   340,133   301,478   38,655   1,313,841   1,170,519   143,322 
Goodwill impairment  -                       -                     
Total operating cost and expenses  810,555   761,398   49,157   1,653,318   1,548,651   104,667   636,059   597,404   38,655   2,289,377   2,146,055   143,322 
Operating Loss  (623,604)  (574,447)  (49,157)  (1,296,555)  (1,191,888)  (104,667)  (478,289)  (439,634)  (38,655)  (1,774,844)  (1,631,522)  (143,322)
Other Income (Expense)          -           -                         
Interest (expense), net  (16,695)  (13,948)  (2,747)  (32,861)  (27,653)  (5,208)  (16,768)  (13,689)  (3,079)  (49,629)  (41,342)  (8,287)
Other income, net  57,102   57,102   -   98,059   97,919   140   52,501   52,501   -   150,560   150,420   140 
Gain (loss) on disposal of subsidiary  -                       -                     
Other income, net  40,407   43,154   (2,747)  65,198   70,266   (5,068)  35,733   38,812   (3,079)  100,931   109,078   (8,147)
Income (loss) before income taxes  (583,197)  (531,293)  (51,904)  (1,231,357)  (1,121,622)  (109,735)  (442,556)  (400,822)  (41,734)  (1,673,913)  (1,522,444)  (151,469)
Income Tax Expense  -   -   -   -   -   -   800   -   800   800   -   800 
Net income (loss)  (583,197)  (531,293)  (51,904)  (1,231,357)  (1,121,622)  (109,735)  (443,356)  (400,822)  (42,534)  (1,674,713)  (1,522,444)  (152,269)
Less: net loss attributable to noncontrolling Interest  (63,099)  (63,099)  -   (129,727)  (129,727)  -   (48,090)  (48,090)  -   (177,817)  (177,817)  - 
Net income (loss) attributable to Hartford Great Health Corp $(520,098) $(468,194) $(51,904) $(1,101,630) $(991,895) $(109,735) $(395,266) $(352,732) $(42,534) $(1,496,896) $(1,344,627) $(152,269)
                                                
Net loss per common share:                                                
Basic and Diluted $(0.01)     $(0.00) $(0.01)     $(0.00) $(0.00)     $(0.00) $(0.01)     $(0.00)
Weighted average shares outstanding:                                                
Basic and diluted  100,108,000       100,108,000   100,108,000       100,108,000   100,108,000       100,108,000   100,108,000       100,108,000 

 

12

 

UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS

 

 Historical Operations Operations Historical Operations disposal Operations  Historical Operations Operations Historical Operations disposal Operations 
 Year ended July 31, 2022   Year ended July 31, 2021  Year ended July 31, 2022   Year ended July 31, 2021 
            Recognition                Recognition    
    Less: Pro Forma     Less: of loss from Pro Forma     Less: Pro Forma     Less: of loss from Pro Forma 
    Discontinued Continuing     Discontinued subsidiaries Continuing     Discontinued Continuing     Discontinued subsidiaries Continuing 
 Historical Operations Operations Historical Operations disposal Operations  Historical Operations Operations Historical Operations disposal Operations 
Tuition revenue $509,920   509,920  $-  $435,149   435,149   -  $-  $509,920   509,920  $-  $435,149   435,149   -  $- 
Service revenue  51,342   51,342   -   118,310   118,310   -    -   51,342   51,342   -   118,310   118,310   -   - 
Total revenue  561,262   561,262   -   553,459   553,459   -    -   561,262   561,262   -   553,459   553,459   -   - 
Operating cost and expenses                                                        
Cost of tuition revenue  653,784   653,784   -   684,409   684,409   -    -   653,784   653,784   -   684,409   684,409   -   - 
Cost of service revenue  23,309   23,309   -   38,429   38,429   -    -   23,309   23,309   -   38,429   38,429       - 
Cost of revenue  677,093   677,093   -   722,838   722,838   -    -   677,093   677,093   -   722,838   722,838   -   - 
Depreciation and amortization  122,065   122,065   -   85,103   85,103   -    -   122,065   122,065   -   85,103   85,103       - 
Selling, general and administrative  1,635,770   1,457,857   177,913   2,691,369   2,435,714   -    255,655   1,635,770   1,457,857   177,913   2,691,369   2,435,714   -   255,655 
Goodwill impairment  -       -   70,514   70,514   -    -   -       -   70,514   70,514   -   - 
Total operating cost and expenses  2,434,928   2,257,015   177,913   3,569,824   3,314,169   -    255,655   2,434,928   2,257,015   177,913   3,569,824   3,314,169   -   255,655 
Operating Loss  (1,873,666)  (1,695,753)  (177,913)  (3,016,365)  (2,760,710)  -    (255,655)  (1,873,666)  (1,695,753)  (177,913)  (3,016,365)  (2,760,710)  -   (255,655)
Other Income (Expense)          -               -           -               - 
Interest (expense), net  (66,587)  (54,730)  (11,857)  (30,886)  (45,692)  -    14,806   (66,587)  (54,730)  (11,857)  (30,886)  (45,692)      14,806 
Gain (loss) on disposal of subsidiary  -           104,317       (53,056)  51,261   -           104,317       (53,056)  51,261 
Other income, net  168,471   168,331   140   101,395   (174,699)  -    276,094   168,471   168,331   140   101,395   45,791      55,604 
Other income, net  101,884   113,601   (11,717)  174,826   (220,391)  (53,056)  342,161   101,884   113,601   (11,717)  174,826   99  (53,056)  121,671 
Loss before income taxes  (1,771,782)  (1,582,152)  (189,630)  (2,841,539)  (2,981,101)  (53,056)  86,506   (1,771,782)  (1,582,152)  (189,630)  (2,841,539)  (2,760,611)  (53,056)  (133,984)
Income (loss) before income taxes  (1,771,782)  (1,582,152)  (189,630)  (2,841,539)  (2,981,101)  (53,056)  86,506   (1,771,782)  (1,582,152)  (189,630)  (2,841,539)  (2,760,611)  (53,056)  (133,984) 
Income Tax Expense  800       800   800           800   800       800   800   

-

       800 
Net Loss  (1,772,582)  (1,582,152)  (190,430)  (2,842,339)  (2,981,101)  (53,056)  85,706   (1,772,582)  (1,582,152)  (190,430)  (2,842,339)  (2,760,611)  (53,056)  (134,784)
Net income(loss)  (1,772,582)  (1,582,152)  (190,430)  (2,842,339)  (2,981,101)  (53,056)  85,706 
Net Income (Loss)  (1,772,582)  (1,582,152)  (190,430)  (2,842,339)  (2,760,611)  (53,056)  (134,784) 
Less: net loss attributable to noncontrolling Interest  (193,481)  (193,481)  -   (589,005)  (590,845)  -    1,840   (193,481)  (193,481)  -   (589,005)  (589,005)  -   - 
Net Loss Attributable to Hartford Great Health Corp $(1,579,101)  (1,388,671) $(190,430) $(2,253,334)  (2,390,256)  (53,056) $83,866  $(1,579,101)  (1,388,671) $(190,430) $(2,253,334)  (2,171,606)  (53,056) $(134,784)
Net income (loss) Attributable to Hartford Great Health Corp $(1,579,101)  (1,388,671) $(190,430) $(2,253,334)  (2,390,256)  (53,056) $83,866  $(1,579,101)  (1,388,671) $(190,430) $(2,253,334)  (2,171,606)  (53,056) $(134,784) 
                                                        
Net loss per common share:                                                        
Basic and Diluted $(0.02)     $(0.00) $(0.02)         $0.00  $(0.02)     $(0.00) $(0.02)         $0.00 
Weighted average shares outstanding:                                                        
Basic and diluted  100,108,000       100,108,000   99,790,192           99,790,192   100,108,000       100,108,000   99,790,192           99,790,192 

 

13

 

UNAUDITED PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET

As of July 31, 2022

 

   Less: Discontinued  Pro Forma Continuing     Less: Discontinued Pro Forma Continuing 
 Historical Operations Operations  Historical Operations Operations 
ASSETS                        
Current Assets                        
Cash and cash equivalents $15,227  $-  $15,227  $15,227  $-  $15,227 
Prepaid and Other current receivables  1,154   -   1,154   1,154   -   1,154 
Related party receivable  14,233   -   14,233   14,233   -   14,233 
Current assets held for sale  784,113   784,113   -   4,499,736   4,499,736   - 
Total Current Assets  814,727   784,113   30,614   4,530,350   4,499,736   30,614 
Non-current Assets                        
Property and equipment, net  8,006   -   8,006   8,006   -   8,006 
Non-current assets held for sale  3,715,623   3,715,623   - 
Total Non-current Assets  3,723,629   3,715,623   8,006   8,006   -   8,006 
TOTAL ASSETS $4,538,356  $4,499,736  $38,620  $4,538,356  $4,499,736  $38,620 
                        
LIABILITIES AND STOCKHOLDERS’ EQUITY                        
Current Liabilities                        
Related party loan and payables $4,481,524   -   4,481,524  $4,481,524   -   4,481,524 
Other current payable  144,760   -   144,760   144,760   -   144,760 
Current liabilities held for sale  3,840,635   3,840,635   -   6,344,721   6,344,721   - 
Total Current Liabilities  8,466,919   3,840,635   4,626,284   10,971,005   6,344,721   4,626,284 
Long-term liabilities held for sale  2,504,086   2,504,086   - 
TOTAL LIABILITIES  10,971,005   6,344,721   4,626,284   10,971,005   6,344,721   4,626,284 
Commitments and contingencies  -          -         
Stockholders’ Equity (Deficit)                        
Preferred stock - $0.001 par value, 5,000,000 shares authorized, no shares issued and outstanding  -       -   -       - 
Common stock - $0.001 par value, 300,000,000 shares authorized, 100,108,000 shares outstanding at July 31, 2022.  100,108       100,108   100,108       100,108 
Additional paid-in capital  2,173,521       2,173,521   2,173,521       2,173,521 
Accumulated deficit  (7,400,620)  (539,230)  (6,861,390)  (7,400,620)  (539,230)  (6,861,390)
Accumulated other comprehensive loss  (16,742)  (16,839)  97   (16,742)  (16,839)  97 
Noncontrolling interest  (1,288,916)  (1,288,916)  -   (1,288,916)  (1,288,916)  - 
Total Stockholders’ Deficit  (6,432,649)  (1,844,985)  (4,587,664)  (6,432,649)  (1,844,985)  (4,587,664)
TOTAL LIABILITIES AND STOCKHOLDERS’ DEFICIT $4,538,356  $4,499,736  $38,620  $4,538,356  $4,499,736  $38,620 

 

14

NOTE 4. RELATED PARTY TRANSACTIONS

 

Related Party Receivables

 

As of July 31, 2022, $428,519related party receivables were allocated to current assets held for sales. See Note 3 Acquisitions and Disposals.

 

$62,169 60,774 and $14,233related party receivable as of JanuaryApril 30, 2023 and July 31, 2023 represents2022, respectively, represent the operating advances made to the affiliates which are managed by the same management team. These advances do not bear interest and are considered due on demand.

Related Party Payables and loans

 

As of January 31,April 30, 2023, and July 31, 2022, amounts of $619,910 605,785and $620,876, are payable to SH Qiaohong, respectively. The balances were mainly funding support from SH Qiaohong for operation. The funding support bears no interest and due on demand.

 

HFSH had payable balances to Shanghai Oversea Chinese Culture Media Ltd. (“SH Oversea”), an entity managed by the same management team, in the amounts of $3,538,687 3,459,443and $3,531,064as of January 31,April 30, 2023 and July 31, 2022, respectively. The payable is funding support from SH Oversea for operation, bears no interest and due on demand.

 

As of January 31,April 30, 2023 and July 31, 2022, amount of $350,000 375,000and $290,000, respectively, borrowed in form of a short-term loan at 5% per annum from a related party, Hartford Hotel Investment Inc., an entity managed by the same management team. $4,089 4,775and $8,178 12,953of interest expenses were recorded during the three and sixnine months ended January 31,April 30, 2023, respectively. $2,748 3,078and $5,209 8,287of interest expense, respectively, were recorded during the three and sixnine months ended January 31,April 30, 2022. The unpaid principal and interest will be due on demand.

 

The remaining related party payable of $76,276 74,538and $39,583as of January 31,April 30, 2023 and July 31, 2022, respectively, represents the unpaid portion of operating advances made to the Company by affiliates which are managed by the same management team. These advances do not bear interest and are considered due on demand.

 

As of July 31, 2022, $1,317,690 1,321,549related party payables were allocated to current liabilities held for sales. See Note 3 Acquisitions and Disposals.

 

Other Related Party Transactions

 

Office space at Rosemead, CA is provided to Hartford Great Health Corp. at no cost by the sole executive officer. No provision for these costs has been included in these financial statements as the amounts are not material.

 

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NOTE 5. COMMITMENTS AND CONTINGENCIES

 

There has been no material contractual obligations and commitments as of January 31,April 30, 2023.

 

NOTE 6. SEGMENT INFORMATION

 

Accounting Standards Codification (“ASC”) 280, “Segment Reporting,” requires public companies to report financial and descriptive information about their reportable operating segments. We identify our operating segments based on how our chief operating decision maker internally evaluates separate financial information, business activities and management responsibility.

 

The Company used to operate in two reportable segments: hospitality (hotel and travel agency) and early childhood education industry in China in the past years. Due to the disposal of operating subsidiaries on August 1, 2022, we currently have one reportable segment.

 

NOTE 7. SUBSEQUENT EVENTS

 

In accordance with ASC 855, “Subsequent Events”, the Company has evaluated subsequent events through the date of issuance of these unaudited financial statements and no subsequent events were noted.

 

Forward-Looking Statements

 

This Form 10-Q contains or incorporates by reference “forward-looking statements,” as that term is used in federal securities laws, about our financial condition, results of operations and business. These statements include, among others:

 

-statements concerning the benefits that we expect will result from our business activities and results of business development that we contemplate or have completed, such as increased revenues; and statements of our expectations, beliefs, future plans and strategies, anticipated developments and other matters that are not historical facts. These statements may be made expressly in this document or may be incorporated by reference to other documents that we will file with the SEC. You can find many of these statements by looking for words such as “believes,” “expects,” “anticipates,” “estimates” or similar expressions used in this report or incorporated by reference in this report.

 

These forward-looking statements are subject to numerous assumptions, risks and uncertainties that may cause our actual results to be materially different from any future results expressed or implied in those statements. Because the statements are subject to risks and uncertainties, actual results may differ materially from those expressed or implied. We caution you not to put undue reliance on these statements, which speak only as of the date of this report. Further, the information contained in this document or incorporated herein by reference is a statement of our present intention and is based on present facts and assumptions, and may change at any time and without notice, based on changes in such facts or assumptions.

 

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Item 2. Management’s Discussion and Analysis or Plan of Operation Overview

 

This discussion updates our business plan for the six-monththree- and nine-month periods ending January 31,April 30, 2023. It also analyzes our financial condition at January 31,April 30, 2023 and compares it to our financial condition at July 31, 2022. This discussion and analysis should be read in conjunction with our audited financial statements for the year ended July 31, 2022, including footnotes, contained in our Annual Report on Form 10-K, and with the unaudited financial statements for the interim period ended January 31,April 30, 2023, including footnotes, which are included in this quarterly report.

 

Overview of the Business

 

Hartford Great Health Corp. was originally incorporated in the State of Nevada on April 2, 2008, under the name PhotoAmigo, Inc. It changed its name to Hartford Great Health Corp. on August 22, 2018, and since then we have been engaged in activities to formulate and implement our business plan as set forth below.

 

Ability to continue as a “going concern”.

 

The independent registered public accounting firms’ reports on our financial statements as of July 31, 2022, includes a “going concern” explanatory paragraph that describes substantial doubt about the Company’s ability to continue as a going concern. Management’s plans in regard to the factors prompting the explanatory paragraph are discussed in the financial statements, including footnotes thereto.

 

Plan of Operation

 

As of January 31,April 30, 2023, the company has issued a total of 100,108,000 shares of common stock. On December 11, 2018, 96,090,000 shares of common stock were issued at the price of $0.02 per share to raise an additional $1,921,800 in capital. On November 24, 2020, the Company issued additional 1,000,000 shares of common stock to a significant shareholder of the Company at $0.02 per share.

 

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On December 28, 2018, the Company acquired Hangzhou Hartford Comprehensive Health Management, Ltd (“HZHF”). On March 22, 2019, the Company acquired 60 percent of Hangzhou Longjing Qiao Fu Vacation Hotel Co., Ltd. (“HZLJ”). On March 20, 2019, the Company acquired Shanghai Hartford Comprehensive Health Management, Ltd. (“HFSH”) with 90 percent of Shanghai Qiao Garden International Travel Agency (“Qiao Garden Int’l Travel”), which was disposed on December 31, 2020, and formed a joint venture entity, Hartford International Education Technology Co., Ltd (“HF Int’l Education”).

 

The subsidiary of HFUS in Shanghai (HFSH) advances operating funds from two related party entities, SH Qiao Hong and SH Oversea Chinese Culture Media Ltd. The main purpose of the funding is to invest in Hartford International Education Technology (Shanghai) Co., Ltd. (HF Int’l Education). Upon signing of supplemental agreement, HFUS currently holds 75.5% ownership of HF Int’l Education and maintains control over HF Int’l Education. On July 24, 2019, HF Int’l Education established a 100% owned subsidiary, Pudong Haojin Childhood Education Ltd. (“PDHJ”). On October 28, 2019, PDHJ had its childhood education center opened. On March 23, 2020, HF Int’l Education established Shanghai Hongkou HaiDeFuDe Childcare Co., Ltd.(“HDFD”) and was approved the business license to conduct childcare operations in Shanghai, China. On July 20, 2020, HF Int’l Education entered an agreement with two individuals to acquire the whole ownership of Shanghai Gelinke Childcare Education Center (“Gelinke”). During the board meeting, SH Jingyu and another noncontrolling shareholders also sold a total of 14.5% equity at zero value to HFSH. As a result, HFSH holds 90% of HF Int’l Education and a total of 10% equity is held by two individual noncontrolling shareholders.

 

HF Int’l Education has developed an enhanced model of childcare franchise management program and registered a new brand name, “HaiDeFuDe”. HF Int’l Education has recruited a team of knowledgeable childcare teachers to develop series of independent textbooks designed to targeted age of young children and register for the copyrights for these textbooks in September of 2020. Since then, HF Int’l Education has begun marketing and promoting the enhanced model of franchise operation and management packaged program, under “HaiDeFuDe” brand, to an initial of 50 franchisees throughout different regions of China. To achieve that, HF Int’l Education has incorporated existing market resources throughout other major cities and provinces in China. The promotion of HF Int’l Education franchise operation and management model was expected to attract other childcare education centers to join the “HaiDeFuDe” brand, and HF Int’l Education expected to generate revenue from franchise and management fees.

 

Due to market uncertainties during the pandemic, the board of HFSH adopted a new management approach to ease cash flow and reduce operation loss. In March 2021, HF Int’l Education entered agreements with Hartford Health Management (Shanghai), Co. Ltd. (“HFHM”). HFHM purchased seven education & intellectual property copy rights and ten “HaiDeFuDe” registered trademarks from HF Int’l Education for a total amount of RMB1.2M and RMB1.0M, respectively. In June 2021, HF Int’l Education and its three subsidiaries entered license agreements with HFHM for the rights to use the intellectual Properties (the “IPs”) HFHM owns. The IPs cover in the license agreements are four sets of curriculum structure designed and fifteen trademarks including “HaiDeFuDe” registered trademarks purchased from HF Int’l Education. As a return, on a monthly basis, HF Int’l Education and its subsidiaries pays 20% of its tuition revenue generated to HFHM as license usage fee.

 

Impacted by Covid-19 pandemic and the government regulation implemented in education industry and the restrictions posted by the Chinese government to control the pandemic in China since 2021, to avoid further operation losses, on August 1, 2022, HFSH entered a contract with a related party, Shanghai Oversea Chinese Culture Media Ltd. (“SH Oversea”), to sell 90 percent ownership of HF Int’l Education and its subsidiaries for $900 (RMB 5,850). On August 1, 2022, HFUS entered a contract with SH Oversea and another individual, to sell 100 percent ownership of HZHF and its subsidiaries for $1,000 (RMB 6,500).

 

The company’s sole subsidiary, HFSH is currently working with herbal manufacturers to develop new herbal health supplement products for wholesale distribution in China. The expected marketing and product launch date is in July of this year.   year  .

 

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Results of Operations – Three months ended January 31,April 30, 2023 Compared to Three months ended January 31,April 30, 2022.

 

Operating Expenses: Operating expenses decreased to $21,362$21,417 for the three months ended January 31,April 30, 2023, compared to $49,157$38,655 during the comparable period of 2022. The decrease of operating expenses was due to the reduction of payroll and professional expenses occurred in US as a result of the downsize of business operation.

 

Other Income (Expense): Other expense, net increased to $4,089$4,776 for the three months ended January 31,April 30, 2023, compared to other income, net of $2,747$3,079 for the corresponding period of 2022. Other expense for the three months ended January 31,April 30, 2023 and 2022 was mainly resulted from interest expenses. Other income for the three months ended January 31, 2022 was mainly resulted from sublease income offset by interest expenses.

 

Net Loss from continuing operations: Net loss from continuing operations decreased to $25,451$26,193 for the three months ended January 31,April 30, 2023, compared to net loss from continuing operations of $51,094$42,534 for the corresponding period of 2022 as result of above.

 

Net Loss from discontinued operations, net of tax: We realized $531,293$400,822 net operation loss, including $186,951$157,770 revenue, $281,596$267,968 cost of revenue and $436,648$329,436 operating expenses and others in the three months ended January 31,April 30, 2022 from two industry segments, the hospitality housing in HZLJ and childhood education care services in HF Int’l Education. These two business operations have been disposed on August 1, 2022. see Note 3 Acquisitions and Disposals.

 

Net Loss Attributable to Noncontrolling Interest: For the three months ended January 31,April 30, 2023, we recorded a net loss attributable to noncontrolling interest of $- compared to $63,099$48,090 for the corresponding period of 2022. The loss was allocated based on the ownership percentage of noncontrolling interest, which has been disposed on August 1, 2022. see Note 3 Acquisitions and Disposals.

 

Net Income (Loss) Attributable to Hartford Great Health Corp: We recorded a net loss of $25,451$26,193 or $0.00 per share for the three months ended January 31,April 30, 2023, compared to a net loss of $520,098$395,266 or $(0.00)$0.00 per share for the three months ended January 31,April 30, 2022, due to the factors discussed above.

 

Results of Operations – Six MonthsNine months Ended January 31,April 30, 2023 Compared to Six MonthsNine months Ended January 31,April 30, 2022

 

Operating Expenses: Operating expenses decreased to $76,010$97,427 for the sixnine months ended January 31,April 30, 2023, compared to $104,667$143,322 during the comparable period of 2022. The decrease of operating expenses was due to the reduction of payroll and professional expenses occurred in US as a result of the downsize of business operation.

 

Other Income (Expense): Other income, net increased to $530,961$526,185 for the sixnine months ended January 31,April 30, 2023, compared to $(5,068)$(8,147) net loss for the corresponding period of 2022. Other income for the sixnine months ended January 31,April 30, 2023 was mainly resulted from the gain on disposal of subsidiaries offset by interest expenses. Other income for the sixnine months ended January 31,April 30, 2022 was mainly resulted from sublease income offset by interest expenses.

 

Net Lossincome (loss) from continuing operations: Net income from continuing operations decreasedincreased to $454,951$428,758 for the sixnine months ended January 31,April 30, 2023, compared to net loss from continuing operations of $109,735$152,269 for the corresponding period of 2022 as result of above.

Net Loss from discontinued operations, net of tax: We realized $1,121,622$1,522,444 net operation loss, including $356,763$514,533 revenue, $616,600$884,568 cost of revenue and $861,785$1,261,487 operating expenses and others in the sixnine months ended January 31,April 30, 2022 from two industry segments, the hospitality housing in HZLJ and childhood education care services in HF Int’l Education. These two business operations have been disposed on August 1, 2022. see Note 3 Acquisitions and Disposals.

 

Net Loss Attributable to Noncontrolling Interest: For the sixnine months ended January 31,April 30, 2023, we recorded a net loss attributable to noncontrolling interest of $- compared to $129,727$177,817 for the corresponding period of 2022. The loss was allocated based on the ownership percentage of noncontrolling interest, which has been disposed on August 1, 2022. see Note 3 Acquisitions and Disposals.

 

Net Income (Loss) Attributable to Hartford Great Health Corp: We recorded a net income of $454,951$428,758 or $0.00 per share for the sixnine months ended January 31,April 30, 2023, compared to a net loss of $1,101,630$1,496,896 or $(0.01) per share for the sixnine months ended January 31,April 30, 2022, due to the factors discussed above.

 

Liquidity and Capital Resources

 

As of January 31,April 30, 2023, we had a working capital deficit of $4,673,487$4,601,424 comprised of current assets of $73,040$76,632 and current liabilities of $4,746,527.$4,678,056. This represents a decrease of $2,978,705$1,839,231 in the working capital deficit from the July 31, 2022 amount of $7,652,192.$6,440,655 . The decrease was primarily because the disposal of operations in hospitality housing and childhood education care services on August 1, 2022. see Note 3 Acquisitions and Disposals.

 

We believe that our funding requirements for the next twelve months will be in excess of $175,000.$175,000  . We are currently seeking for further funding through related parties’ loan and finance.

 

As of January 31,April 30, 2023, the company has issued a total of 100,108,000 shares of common stock. On December 11, 2018, 96,090,000 shares of common stock were issued at the price of $0.02 per share to raise an additional $1,921,800 in capital. On November 24, 2020, the Company issued additional 1,000,000 shares of common stock to a significant shareholder of the Company at $0.02 per share.

 

We will seek additional financing in the form of debt or equity. There is no assurance that we will be able to obtain any needed financing on favorable terms, or at all, or that we will find qualified purchasers for the sale of our stock. Any sales of our securities would dilute the ownership of our existing investors.

 

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Cash Flows – SixNine months ended January 31,April 30, 2023 Compared to SixNine months ended January 31,April 30, 2022

 

Operating Activities

 

During the sixnine months ended January 31,April 30, 2023, $63,128$83,083 used in operating activities as compared to $653,284$1,041,031 used in the operations during the sixnine months ended January 31,April 30, 2022. During the sixnine months ended January 31,April 30, 2023, we recorded net income of $454,951,$428,758, adjusted by subsidiary disposal gain of $539,230, related party payables net with receivables increased by $26,955$33,211 and offset by other current payable decreased by $6,631.$6,654.

 

During the sixnine months ended January 31,April 30, 2022, we recorded loss from continuing operation of $109,735,$152,269, incurred other current payable increased by $4,209,$6,065, related party payables net with receivables increased by $117,978,$20,476, and offset by $665,736$915,303 net cash used in operating activities from discontinued operations.

 

Investing activities

 

Nil of investing activities occurred during the sixnine months ended January 31,April 30, 2023.

 

Cash used in investing activities was $174,317$174,277 for the sixnine months ended January 31,April 30, 2022. The cash used in investing activities was primarily due to the expenditure of leasehold improvements in HF Int’l Education, one of the discontinued operations.

 

Financing activities

 

Cash provided by financing activities was $60,000$85,000 for the sixnine months ended January 31,April 30, 2023 as compared to $784,576$1,177,463 cash provided by financing activities for the sixnine months ended January 31,April 30, 2022. The cash flows provided by financing activities for the sixnine months ended January 31,April 30, 2023 was from the proceeds of notes payable. The notes payable was borrowed from one related party with 5% annual interest rate. See Note 4 Related Party Transactions.

 

The cash flows provided by financing activities for the sixnine months ended January 31,April 30, 2022 was primarily attributable to $704,576$1,018,395 funding support from related parties, $80,000$120,000 proceeds of notes payable. The notes payable was borrowed from one related party with 5% annual interest rate.

 

Future Capital Expenditures

 

As of January 31,April 30, 2023, we have no future capital expenditures plan.

 

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Off-Balance Sheet Arrangements

 

As of and subsequent to January 31,April 30, 2023, we have no off-balance sheet arrangements.

 

Contractual Commitments

 

As of January 31,April 30, 2023, we don’t have material contractual commitments.

 

Critical Accounting Policies

 

Our significant accounting policies are disclosed in Note 1 of the footnotes to our unaudited financial statements above. There have been no other changes in our critical accounting policies since our most recent audit dated July 31, 2022.

 

Item 3. Quantitative and Qualitative Disclosures about Market Risk

 

As a “smaller reporting company” as defined by Item 10 of Regulation S-K, we are not required to provide information required by this Item.

 

Item 4. Controls and Procedures

 

Evaluation of Disclosure Controls and Procedures

 

An evaluation was performed under the supervision of our management, including our Chief Executive Officer and Chief Financial Officer (principal financial officer), of the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) of the Exchange Act) as of the end of the period covered by this Quarterly Report. Based on that evaluation, our management, including our Chief Executive Officer and Chief Financial Officer, concluded that, as of January 31,April 30, 2023, our disclosure controls and procedures were not effective to ensure that information we are required to disclose in reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms due to material weaknesses in our internal controls described below.

 

Management’s Report on Internal Control over Financial Reporting

Management’s assessment identified several material weaknesses in our internal control over financial reporting. These material weaknesses include the following:

 

 Lack of proper authorization and approval procedures on significant business transactions.
   
 Lack of competence accounting personnel at entity level and proper segregation of duties implemented.

 

Changes in Internal Control

 

During the threenine months period ended January 31,April 30, 2023, there has been no change in internal control within the Company.

 

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PART II – OTHER INFORMATION

 

Item 1. Legal Proceedings.Proceedings.

 

We were not subject to any other legal proceedings during the sixnine months ended January 31,April 30, 2023, and are not currently subject to any legal proceedings, and to the best of our knowledge, no such proceeding is threatened, the results of which would have a material impact on our results of operation or financial condition. Nor, to the best of our knowledge, are any of our officers or directors involved in any legal proceedings in which we are an adverse party.

 

Item 1A. Risk Factors.

 

As a “smaller reporting company” as defined by Item 10 of Regulation S-K, we are not required to provide information required by this Item.

 

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.

 

None

 

Item 3. Defaults Upon Senior Securities.

 

None

 

Item 4. Mine Safety Disclosures

 

Not applicable to our Company.

 

Item 5. Other Information

 

Not applicable to our Company.

 

Item 6. Exhibits.

 

The following exhibits are filed with or incorporated by referenced in this report:

 

31.1* Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 for Rose Hong Wang.

 

31.2* Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 for Sheng-Yih Chang

 

32.1* Certification pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 for Rose Hong Wang and Sheng-Yih Chang

 

101 Interactive Data Files

 

101.INS Inline XBRL Instance Document

 

101.SCH Inline XBRL Taxonomy Extension Schema Document

 

101.CAL Inline XBRL Taxonomy Extension Calculation Linkbase Document

 

101.DEF Inline XBRL Taxonomy Extension Definition Linkbase Document

 

101.LAB Inline XBRL Taxonomy Extension Label Linkbase Document

 

101.PRE Inline XBRL Taxonomy Extension Presentation Linkbase Document

 

104 Cover Page Interactive Data File (embedded within the Inline XBRL document)

 

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SIGNATURES

 

In accordance with Section 13 or 15(d) of the Exchange Act of 1934, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

 

 HARTFORD GREAT HEALTH CORP.
Date: March 24,June 12, 2023By:/s/ ROSE HONG WANG
  Rose Hong Wang
  Chief Executive Officer

 

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