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 |
Securities registered pursuant to Section 12(g) of the Act: Common Stock, Par value $0.001
State the number of shares outstanding of each of the issuer'sissuer’s classes of common equity, as of the latest practicable date: 3,018,000 shares of common stock outstanding as of October 31, 2017.30, 2023.
TABLE OF CONTENTS
ADDITIONAL INFORMATION
Descriptions of agreements or other documents contained in this report are intended as summaries and are not necessarily complete. Please refer to the agreements or other documents filed or incorporated herein by reference as exhibits. Please see the exhibit index at the end of this report for a complete list of those exhibits.
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SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS
This report contains "forward-looking statements"“forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. These statements are subject to risks and uncertainties and are based on the beliefs and assumptions of management and information currently available to management. The use of words such as "believes"“believes”, "expects"“expects”, "anticipates"“anticipates”, "intends"“intends”, "plans"“plans”, "estimates"“estimates”, "should"“should”, "likely"“likely” or similar expressions, indicates a forward-looking statement.
The identification in this report of factors that may affect future performance and the accuracy of forward-looking statements is meant to be illustrative and by no means exhaustive. All forward-looking statements should be evaluated with the understanding of their inherent uncertainty.
Factors that could cause actual results to differ materially from those expressed or implied by forward-looking statements include, but are not limited to:
| ● | The worldwide economic situation; | |
| ● | Any change in interest rates or inflation; | |
| ● | The willingness and ability of third parties to honor their contractual commitments; | |
| ● | The | |
| ● | The | |
| ● | The | |
| ● | Environmental and other regulations, as the same presently exist or may later be amended; | |
| ● | The | |
| ● | The volatility of the |
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PART I
ITEM 1. BUSINESS.
General
Hartford Great Health Corp. (“the Company"' "we"Company”, "us"“Hartford” “we”, “us” or our"our”) was incorporated in the State of Nevada on April 2, 2008 ("(“Inception) under the name PhotoAmigo, Inc. It changed its name to Hartford Great Health Corp. on August 20, 2018, and since then we have been engaged in activities to formulate and implement our business plan as explainedset forth below.
Overview
Up until August 2018, we provided social networking and photo sharing from the website PhotoAmigo.com. We also maintainmaintained the domain names PhotoAmigo.net, fotoamigo.com and fotoamigo.net. These domain names all redirect incoming traffic to our main website, PhotoAmigo.com.
In August 2018, the Company changed its future plans of operations. 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, see note 4 Acquisitions and Disposals.
The Company started to upload photos, share comments via photo blogs,engage in early childhood education industry at Hartford International Education Technology Co., Ltd (“HF Int’l Education”). HFSH originally held 75.5% ownership of HF Int’l Education and print photos through third-party vendors. Our free services allow usersmaintains control over HF Int’l Education. During the board meeting in 2021, SH Jingyu and another noncontrolling shareholders sold a total of 14.5% equity at zero value to upload upHFSH. As a result, HFSH holds 90% of HF Int’l Education and a total of 10% equity is held by two individual noncontrolling shareholders. On July 24, 2019 and March 23, 2020, HF Int’l Education established two 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% owned subsidiary, Shanghai HDFD Zhongli Education Technology Co., Ltd. (“Zhongli”), two individual investors hold the remaining 4% ownership, see note 4 Acquisitions and Disposals.
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 photos per day. We offer“HaiDeFuDe” registered trademarks from HF Int’l Education for a premium service which is priced at $19.99 per yeartotal amount of RMB1.2M and allows for unlimited uploading of photos.RMB1.0M, respectively. As a part of the datepurchase agreement, HFHM was originally agreed to be paid the 90% of this prospectus, all of our users are using our free service.
The following business plan was based on research and we estimate that we will require a minimum of six monthsdiscussions between the board and third party suppliers and experts. Only preliminary activities relating to begin generating revenue from display advertising. In order to generate revenue from advertising, we will need to increase traffic to our website.
Strategy
The initial plan focuses on the development of the Sino-U.S. health industry in the following four areas:
A. International Anti-Aging Membership Program,
B. Artificial Intelligence and Medical Equipment Sales,
C. Mobile Lifestyle Health & Wellness Management Platform,
D. Integrated Health Management of Metabolic Diseases.
The Company has also expanded its strategy into the hospitality industry, focusing on hotels, restaurants, and travel arrangements. The Company plans to our members:
The initial plan in early 2019 that focused on the development of the Sino-U.S. health industry in the areas of International Anti-Aging membership based program; Artificial Intelligence and Medical Equipment Sales; Mobile Lifestyle Management Platform; and Integrated management of metabolic diseases have been put on hold due to economic uncertainties caused by the increasing tension between the US and China international relation.
Near the end of 2019, the Company has found another opportunity to expand its market reach in the Chinese childhood education industry. The Company plans to formulate a varietyproprietary early childhood education center management model beginning with the opening of marketing strategies to build overall traffic toseveral early childhood education centers in the site and intend to emphasize our marketing efforts. We plan to gain new members by offeringgreater Shanghai area with the free subscription level but will use marketing efforts withingoal of demonstrating the site to upgrade our members to a paid program. To cultivate new members, we plan to use the following marketing strategies:
There can be no assurance following consummation of any of the business ventures will develop into a going concern or, if the business is already operating, that it will continue to operate successfully. Many of these sites have grownthe potential business opportunities available to recognized brand names and receive millions of uploaded photos each day. We believe that some users are interested in using a smaller site in which their photos can be featured.
The Company’s independent auditors have shared more than 200 million photos sinceissued a report raising substantial doubt about the site's inception in October 2002. The press release went onCompany’s ability to call Fotolog "the world's largest photo-blogging communitycontinue as a going concern. At present, the Company has limited operations and the third most trafficked social media network oncontinuation of the Internet." It added, "Fotolog has grown 100 percent virally sinceCompany as a going concern is dependent upon financial support from its founding in 2002,stockholders, its ability to obtain necessary equity financing to continue operations and/or to successfully locate and negotiate with no marketing or member incentives."
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Employees
As of the operation of the Public Reference Room by calling the SEC at 1-800-SEC-0030.The SEC maintains an Internet site (http://www.sec.gov) that contains reports, proxy and information statements and other information regarding issuers that file electronically with the SEC.
ITEM 1A. RISK FACTORS
As a "smaller“smaller reporting company"company” as defined by Item 8 of Regulation S-K, the Company is not required to provide information required by this Item.
ITEM 1B. UNRESOLVED STAFF COMMENTS
None.
ITEM 2. PROPERTIES
Hartford Great Health Corp. uses the offices of its Chief Executive Officer, at 8832 Glendon Way, Rosemead, CA 91770, for its minimal office facility needs for no consideration.
Due to the discontinued operation in August 2022, we currently do not lease or own any real property.
ITEM 3. LEGAL PROCEEDINGS
We were not subject to any other legal proceedings during the twelve months ended July 31, 2017 and 20162023, 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 4. MINE SAFETY DISCLOSURES
Not applicable to our Company.
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PART II
ITEM 5. MARKET FOR COMMON EQUITY. RELATED STOCKHOLDER MATTERS AND PURCHASES OF EQUITY SECURITIES
Market Information
There has only been limited trading for the Company’s Common Stock since it was quoted on OTC Markets. There is currently no market for Photoamigo's common stock and there can be no assurance that an active trading market will ever develop or, if such a market does develop, that it will developcontinue. The Securities and Exchange Commission has adopted Rule 15g-9 which establishes the definition of a “penny stock,” for purposes relevant to the Company, as any equity security that has a market price of less than $5.00 per share or with an exercise price of less than $5.00 per share, subject to certain exceptions. For any transaction involving a penny stock, unless exempt, the rules require: (i) that a broker or dealer approve a person’s account for transactions in penny stocks and (ii) the broker or dealer receive from the investor a written agreement to the transaction, setting forth the identity and quantity of the penny stock to be purchased. In order to approve a person’s account for transactions in penny stocks, the broker or dealer must (i) obtain financial information and investment experience and objectives of the person and (ii) make a reasonable determination that the transactions in penny stocks are suitable for that person and that person has sufficient knowledge and experience in financial matters to be capable of evaluating the risks of transactions in penny stocks. The broker or dealer must also deliver, prior to any transaction in a penny stock, a disclosure schedule prepared by the Commission relating to the penny stock market, which, in highlight form, (i) sets forth the basis on which the broker or dealer made the suitability determination and (ii) that the broker or dealer received a signed, written agreement from the investor prior to the transaction. Disclosure also has to be made about the risks of investing in penny stocks in both public offerings and in secondary trading, and about commissions payable to both the broker-dealer and the registered representative, current quotations for the securities and the rights and remedies available to an investor in cases of fraud in penny stock transactions. Finally, monthly statements have to be sent disclosing recent price information for the penny stock held in the future. The Company has submitted a 15c211 applicationaccount and information on the limited market in penny stocks.
Because of these regulations, broker-dealers may encounter difficulties in their attempt to buy or sell shares of our common stock, which may affect the OTC Bulletin Boardability of our shareholders to sell their shares in the secondary market and have the Company'seffect of reducing the level of trading activity in the secondary market. These additional sales practice and disclosure requirements could impede the sale of our common stock quotedin the market place. In addition, the liquidity for our common stock may be decreased, with a corresponding decrease in the price of our common stock. Our shares are likely to be subject to such penny stock rules for the foreseeable future.
On October 30, 2023, the closing price of our common stock reported on the OTC Bulletin Board. Such application is currently pending.
| Fiscal 2023 | Low | High | ||||||
| First Quarter | $ | 0.16 | $ | 0.16 | ||||
| Second Quarter | $ | 0.16 | $ | 0.16 | ||||
| Third Quarter | $ | 0.03 | $ | 1.10 | ||||
| Fourth Quarter | $ | 0.88 | $ | 1.10 | ||||
| Fiscal 2024 | Low | High | ||||||
| First Quarter | $ | 0.88 | $ | 0.88 | ||||
Holders
As of October 31, 2017,30, 2023, a total of 3,018,000100,108,000 shares of our common stock were outstanding and there were approximately 3352 holders of record.
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Penny Stock Rules
Due to the price of our common stock, as well as the fact that we are not listed on Nasdaq or a national securities exchange, our stock is characterized as "penny stocks"“penny stocks” under applicable securities regulations. Our stock will therefore be subject to rules adopted by the Securities and Exchange Commission ("SEC"(“SEC”) regulating broker-dealer practices in connection with transactions in penny stocks. The broker or dealer proposing to effectaffect a transaction in a penny stock must furnish his customer a document containing information prescribed by the SEC and obtain from the customer an executed acknowledgment of receipt of that document. The broker or dealer must also provide the customer with pricing information regarding the security prior to the transaction and with the written confirmation of the transaction. The broker or dealer must also disclose the aggregate amount of any compensation received or receivable by him in connection with such transaction prior to consummating the transaction and with the written confirmation of the trade. The broker or dealer must also send an account statement to each customer for which he has executed a transaction in a penny stock each month in which such security is held for the customer'scustomer’s account. The existence of these rules may have an effect on the price of our stock, and the willingness of certain brokers to effect transactions in our stock.
Transfer Agent
We have appointed CorporateSignature Stock Transfer, Inc. ("CST"), as the transfer agent for our common stock. The principal office of CSTSignature Stock Transfer is located at 3200 Cherry Creek Drive South,16801 Addison Road, Suite 430, Denver, CO 80209247, Addison, Texas 75001 and its telephone number is (303) 282-4800.
Dividend Policy
We have never declared or paid dividends on our common stock. Payment of future dividends, if any, will be at the discretion of our Board of Directors after taking into account various factors, including the terms of any credit arrangements, our financial condition, operating results, current and anticipated cash needs and plans for expansion. At the present time, we intend to retain any earning in our business, and therefore do not anticipate paying dividends in the foreseeable future.
Recent Sales of Unregistered Securities; Use of Proceeds from Unregistered Securities
None
ITEM 6. SELECTED FINANCIAL DATA
As a "smaller“smaller reporting company"company” as defined by Item 8 of Regulation S-K, the Company is not required to provide information required by this Item.
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ITEM 7. MANAGEMENTS'SMANAGEMENTS’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATION
The following discussion and analysis waswere prepared to supplement information contained in the accompanying financial statements and is intended to explain certain items regarding the financial condition as of July 31, 2017,2023, and the results of operations for the years ended July 31, 2017,2023, and 2016.2022. It should be read in conjunction with the audited financial statements and notes thereto contained in this report.
Overview of the Business
Hartford Great Health Corp. was originally incorporated in the State of Nevada on April 2, 2008. Since inception,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.
Ability to continue as a "going“going concern
The independent registered public accounting firms'firms’ reports on our financial statements as of July 31, 20172023 and 2016,2022, includes a "going concern"“going concern” explanatory paragraph that describes substantial doubt about the Company'sCompany’s ability to continue as a going concern. Management'sManagement’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 July 31, 2017,2023, 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.
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.
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Due to continued 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.
However, due to China’s continual of zero-Covid policy implementation this year as well as Covid-19 lockdown for over two months in Greater Shanghai, childcare and childhood education center were forced to halt operations; therefore, the Company decides to divert its plan from childcare and childhood educational development industry. 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 push out to end of this year due to deflation in China.
Liquidity and Capital Resources
As of July 31, 2023, we had negative working capital of $500$4,490,436 comprised of current assets of $1,928$7,037 and current liabilities of $2,428$4,497,473. This represents an improvementa decrease of $1,950,219 in negativethe working capital of $2,261balance from the July 31, 2016 balance2022 negative amount of $2,761. During$6,440,655. The decrease was primarily because the year-ended July 31, 2017 our working capital increased because we received moredisposal of operations in financing activities than we used in operating activities.
We believe that our funding requirements for the next twelve months will be approximately $20,000,in excess of $175,000. We are currently seeking for further funding through related parties’ loan and we do not currently have these financial resources. We estimate that our cash resources will allow us to operate for approximately one andfinance.
As of July 31, 2023, the company has issued a half month.
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.
Cash Flows – Year Ended July 31, 2023 Compared to Year Ended July 31, 2022
Operating Activities
During the year ended July 31, 2023, $123,363 used in operating activities compared to $860,832 used in the operations during the year ended July 31, 2022.
During the year ended July 31, 2023, we recorded net income of $396,903, adjusted by subsidiary disposal gain of $539,230, related party payables increased by $17,789 as a result of interest accrued for related party notes payable and offset by other current payable decreased by $6,628.
During the year ended July 31, 2022, we recorded loss from continuing operation of $190,430, other current payable increased by $9,564, related party payables net with receivables decreased by $2,500, and $677,466 net cash used in operating activities from discontinued operations.
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Investing activities
The cash used in investing activities was $4,938 for the year ended July 31, 2023 as a result of the disposal of the subsidiaries. see note 4 Acquisitions and Disposals.
Cash used in investing activities was $145,048 for the year ended July 31, 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 $115,568 for the year ended July 31, 2023 as compared to $972,267 cash provided by financing activities for the year ended July 31, 2022. The cash flows provided by financing activities during the year ended July 31, 2023 was from the proceeds of notes payable and funding support from related parties. The notes payable was borrowed from one related party with 5% annual interest rate. See Note 6 Related Party Transactions.
The cash flows provided by financing activities for year ended July 31,2022 was primarily attributable to $788,673 funding support from related parties, $145,000 proceeds of notes payable and $38,594 net cash provided by financing activities from discontinued operations. The notes payable was borrowed from one related party with 5% annual interest rate.
Equity and Capital Resources
We currentlyhave incurred losses since inception of our business and, as of July 31, 2023, we had an accumulated deficit of $7,003,717 compared to $7,400,620 at the previous year end. To date, we have funded our operations through short-term debt and equity financing.
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, we disposed the main operational entities in China. Consequently, we are dependent on the proceeds from future debt or equity investments to implement our future business plan. If we are unable to raise sufficient capital, we will be required to delay or forego most of our business plan, which would have a material adverse effect on our anticipated results from operations and financial condition. There is no assurance that we will be able to obtain necessary amounts of additional capital or that our estimates of our capital requirements will prove to be accurate.
Future Capital Expenditures
As of July 31, 2023, we have no written or firm agreement regarding future funding requirements, and we may curtail our efforts or cease activities entirely.
Off-Balance Sheet Arrangements
As of and subsequent to July 31, 2017, we have no plans or commitments to acquire additional cpital assets.
Contractual Commitments
As of July 31, 2017,2023, we have no material contractual commitments.
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Results of Operations- Year Ended July 31, 20172023 Compared to Year Ended July 31, 2016
Operating expenses
Other Income (Expense): Other expense, net amount of $521,353 for the year ended July 31, %.2023, compared to $11,717 of other expense for the corresponding period of 2022. Other income for the year ended July 31, 2023 was mainly resulted from the gain on disposal of subsidiaries offset by interest expenses. Other expense for the year ended July 31, 2022 was mainly resulted from interest expenses.
Net income (loss) from continuing operations: Net income from continuing operations increased to $396,903 for the year ended July 31, 2023, compared to net loss from continuing operations of $190,430 for the corresponding period of 2022 as result of above.
Net Loss from discontinued operations, net of tax: We realized $1,582,152 net operation loss, including $561,262 revenue, $677,093 cost of revenue and $1,579,922 operating expenses and $113,601 other income for the year ended July 31, 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 4 Acquisitions and Disposals)
Net Loss Attributable to Noncontrolling Interest: For the year ended July 31, 2023, zero net loss attributable to Noncontrolling interest of compared to $193,481 for the corresponding period of 2022. The majority coming from website development whichloss was unusually high during 2016. allocated based on the ownership percentage of noncontrolling interest. (see note 4 Acquisitions and Disposals)
Net income (loss) Attributable to Hartford Great Health Corp: We incur these website development expenses in connection with activities to develop our business. We also incur professional fees in connection with the activities required to prepare disclosure documents. Consistent with our current need to conserve capital resources, we have reduced our website development, marketing, and certain general and administrative expenses. Investor relations expenses decreased $617 during 2017 in connection with preparation of information to be included in our registration statement. Accounting and legal expenses decreased $1,262 from 2016.
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Accounting Policies and Pronouncements
Critical Accounting Policies and Estimates
Our consolidated financial statements are prepared in conformityaccordance with accounting principles generally accepted in the United States of AmericaGAAP. GAAP requires managementus to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities atin our consolidated financial statements. Critical accounting estimates are those that management believes are the datemost important to the portrayal of the financial statements and the reported amounts of revenues and expenses during the reporting period. Significant estimates have been used by management in conjunction with the measurement of the valuation allowance relating to deferred tax assets and future cash flows associated with long-lived assets. Actual results could differ from those estimates.
The following summarizes our most significant critical accounting estimates:
Foreign Currency: The accounts of the Company’s foreign subsidiaries are translated in accordance with FASB ASC 830. Foreign currency transaction gains and losses are recognized in other expense, net, at the time they occur. Net foreign currency exchange gains or losses resulting from the translation of assets and liabilities of foreign subsidiaries whose functional currency is not the U.S. dollar are recorded as a Development Stage Entitypart of accumulated other comprehensive loss in stockholders’ equity. The Company does not undertake hedging transactions to cover its foreign currency exposure.
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 discussed above.
| 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 year end July 31, 2023. For the year ended July 31, 2022, $509,920 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 year ended July 31, 2023.
Recent Accounting Pronouncements.
See “Part II, Item 8 – Financial Statements – Note 1 –Summary of Significant Accounting Policies – Recent Accounting Pronouncements” for a full description of recent accounting pronouncements including the respective expected dates of adoption and expected effects on the Company’s consolidated financial position, results of operations or liquidity.
Item 7A. QuantativeQuantitative and QualatativeQualitative Disclosures About Market Risk
As a "smaller“smaller reporting Company"Company” as defined by Item 8 of Regulation S-K, the Company is not required to provide information required by this Item.
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ITEM 8. FINANCIAL STATEMENTS
Report of Independent Registered Public Accounting Firm
Shareholders and Board of Directors
Hartford Great Health Corp.
Opinion on the Consolidated Financial Statements
We have audited the accompanying consolidated balance sheetsheets of PhotoAmigo, Inc.Hartford Great Health Corp. and subsidiary (the “Company”) as of July 31, 20172023 and 2016 and2022, the related consolidated statements of operations, stockholders' equityoperation and comprehensive income (loss), changes in stockholders’ deficit and cash flows for each of the two years then ended. PhotoAmigo, Inc.s' management is responsible for thesein the period ended July 31, 2023, and the related notes to the consolidated financial statements. In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of July 31, 2023 and 2022, and the results of its operations and its cash flows for each of the two years in the period ended July 31, 2023, in conformity with accounting principles generally accepted in the United States of America.
Going Concern Uncertainty
The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern. As described in Note 2 to the consolidated financial statements, the Company has suffered recurring losses from operations and has a net capital deficiency that raise substantial doubt about its ability to continue as a going concern. Management’s evaluation of the events and conditions and management’s plans regarding these matters are also described in Note 2. The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.
Basis for Opinion
These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on thesethe Company’s consolidated financial statements based on our audits.
We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States).PCAOB. Those standards require that we plan and perform the auditsaudit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement. The Company is not requiredmisstatement, whether due to have, nor were we engagederror or fraud.
Our audits included performing procedures to perform, an auditassess the risks of its internal control overmaterial misstatement of the consolidated financial reporting. Our audit included consideration of internal control over financial reporting as a basis for designing auditstatements, whether due to error or fraud, and performing procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control over financial reporting. Accordingly, we express no such opinion. An audit includesrespond to those risks. Such procedures included examining, on a test basis, evidence supportingregarding the amounts and disclosures in the consolidated financial statements, assessingstatements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statement presentation.statements. We believe that our audits provide a reasonable basis for our opinion.
Critical Audit Matter
The critical audit matter communicated below is a matter arising from the current period audit of the consolidated financial statements referredthat was communicated or required to above present fairly, in allbe communicated to the audit committee and that: (1) relates to accounts or disclosures that are material respects,to the financial position of PhotoAmigo, Inc. as of July 31, 2017 and 2016 and the results of its operations and its cash flows for the years then ended, in conformity with accounting principles generally accepted in the United States of America.
/s/ Simon & Edward, LLP
We have been prepared assuming thatserved as the Company will continue as a going concern. As discussed in Note 2 to the financial statements the Company has suffered recurring losses from operations, and has minimal working capital which raises substantial doubt about its ability to continue as a going concern. Management's plans in regard to these matters are also described in Note 2. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.
PCAOB ID: 2485
Rowland Heights, California
October 30, 2023
| 14 |
HARTFORD GREAT HEALTH CORP.
CONSOLIDATED BALANCE SHEETS
| July 31,2017 | July 31, 2016 | |||||||
| ASSETS | ||||||||
| Current assets: | ||||||||
| Cash and cash equivalents | $ | 1,928 | $ | 359 | ||||
| Total current assets | 1,928 | 359 | ||||||
| Fixed Assets | ||||||||
| Computer equipment | 2,792 | 2,792 | ||||||
| Accumulated depreciation | (2,262 | ) | (1,329 | ) | ||||
| Net book value | 530 | 1,463 | ||||||
| Total assets | $ | 2,458 | $ | 1,822 | ||||
| LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT) | ||||||||
| Current liabilities: | ||||||||
| Accounts payable | $ | 2,191 | $ | 3,120 | ||||
| Accrued Interest to stockholders | 237 | - | ||||||
| Advances from stockholders | 21,180 | - | ||||||
| Total current liabilities | 23,608 | 3,120 | ||||||
| Total liabilities | 23,608 | 3,120 | ||||||
| Commitments and contingencies (Notes 2 and 4) | ||||||||
| Stockholders' equity (deficit): | ||||||||
| Preferred stock - $0.001 par value, 5,000,000 shares authorized: | ||||||||
| No shares issued or outstanding | - | - | ||||||
| Common stock - $0.001 par value, 100,000,000 shares authorized: | ||||||||
| 3,018,000 shares issued and outstanding | 3,018 | 3,018 | ||||||
| Additional paid-in capital | 283,113 | 283,113 | ||||||
| Accumulated (deficit) | (307,281 | ) | (287,429 | ) | ||||
| Total stockholders' equity(deficit) | (21,150 | ) | (1,298 | ) | ||||
| Total liabilities and stockholders' equity (deficit) | $ | 2,458 | $ | 1,822 | ||||
| July 31, 2023 | July 31, 2022 | |||||||
| ASSETS | ||||||||
| Current Assets | ||||||||
| Cash and cash equivalents | $ | 5,793 | $ | 15,227 | ||||
| Prepaid and Other current receivables | 280 | 1,154 | ||||||
| Related party receivable | 964 | 14,233 | ||||||
| Current assets held for sale | - | 4,499,736 | ||||||
| Total Current Assets | 7,037 | 4,530,350 | ||||||
| Non-current Assets | ||||||||
| Property and equipment, net | 730 | 8,006 | ||||||
| Total Non-current Assets | 730 | 8,006 | ||||||
| TOTAL ASSETS | $ | 7,767 | $ | 4,538,356 | ||||
| LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||||
| Current Liabilities | ||||||||
| Related party loan and payables | $ | 4,367,194 | $ | 4,481,524 | ||||
| Other current payable | 130,279 | 144,760 | ||||||
| Current liabilities held for sale | - | 6,344,721 | ||||||
| Total Current Liabilities | 4,497,473 | 10,971,005 | ||||||
| Long-term liabilities held for sale | - | - | ||||||
| TOTAL LIABILITIES | 4,497,473 | 10,971,005 | ||||||
| Commitments and contingencies | - | - | ||||||
| Stockholders’ Deficit | ||||||||
| Preferred stock - $ par value, shares authorized, shares issued and outstanding | - | - | ||||||
| Common stock - $ par value, shares authorized, shares outstanding at both of July 31, 2023 and 2022. | 100,108 | 100,108 | ||||||
| Additional paid-in capital | 2,173,521 | 2,173,521 | ||||||
| Accumulated deficit | (7,003,717 | ) | (7,400,620 | ) | ||||
| Accumulated other comprehensive loss | 240,382 | (16,742 | ) | |||||
| Noncontrolling interest | - | (1,288,916 | ) | |||||
| Total Stockholders’ Deficit | (4,489,706 | ) | (6,432,649 | ) | ||||
| TOTAL LIABILITIES AND STOCKHOLDERS’ DEFICIT | $ | 7,767 | $ | 4,538,356 | ||||
The accompanying notes are an integral part of these financial statements.
| 15 |
HARTFORD GREAT HEALTH CORP.
CONSOLIDATED STATEMENTS OF OPERATIONS
| Year | Year | |||||||
| ended | ended | |||||||
| July 31, 2017 | July 31, 2016 | |||||||
| Revenues | $ | - | $ | - | ||||
| Operating expenses: | ||||||||
| Website development | 2,193 | 8,983 | ||||||
| Legal and accounting fees | 11,138 | 12,400 | ||||||
| Investor relations | 4,868 | 5,485 | ||||||
| Other general and administrative | 483 | 610 | ||||||
| Depreciation Expense | 933 | 933 | ||||||
| Total operating expenses | 19,615 | 28,411 | ||||||
| Operating (loss) | (19,615 | ) | (28,411 | ) | ||||
| Other income(expense): | ||||||||
| Interest expense | (237 | ) | - | |||||
| Other income (expense) net | (237 | ) | - | |||||
| Net (loss) | $ | (19,852 | ) | $ | (28,411 | ) | ||
| Net (loss) per common share: | ||||||||
| Basic and Diluted | $ | (0.01 | ) | $ | (0.01 | ) | ||
| Weighted average shares outstanding: | ||||||||
| Basic and Diluted | 3,018,000 | 3,018,000 | ||||||
| 2023 | 2022 | |||||||
| Years ended July 31, | ||||||||
| 2023 | 2022 | |||||||
| Selling, general and administrative | 123,650 | 177,913 | ||||||
| Total operating cost and expenses | 123,650 | 177,913 | ||||||
| Operating Loss | (123,650 | ) | (177,913 | ) | ||||
| Other Income (Expense) | ||||||||
| Interest (expense) income, net | (17,789 | ) | (11,857 | ) | ||||
| Gain on disposal of subsidiaries | 539,230 | - | ||||||
| Other income, net | (88 | ) | 140 | |||||
| Other (expense) income, net | 521,353 | (11,717 | ) | |||||
| (Loss) income before income taxes | 397,703 | (189,630 | ) | |||||
| Income Tax Expense | 800 | 800 | ||||||
| Net (loss) income from continuing operations | 396,903 | (190,430 | ) | |||||
| Less: net income from continuing operations attributable to noncontrolling Interest | - | - | ||||||
| Net (loss) income from continuing operations Attributable to Hartford Great Health Corp | $ | 396,903 | $ | (190,430 | ) | |||
| Income loss from discontinued operations, net of income taxes | - | (1,582,152 | ) | |||||
| Less: net loss from discontinued operations attributable to noncontrolling Interest | - | (193,481 | ) | |||||
| Net loss from discontinued operations Attributable to Hartford Great Health Corp | $ | - | $ | (1,388,671 | ) | |||
| Net loss per common share: | ||||||||
| Continuing operations | ||||||||
| Discontinued operations | ) | |||||||
| Basic and Diluted | $ | $ | ) | |||||
| Weighted average shares outstanding: | ||||||||
| Basic and diluted | ||||||||
The accompanying notes are an integral part of these financial statements.
| 16 |
HARTFORD GREAT HEALTH CORP.
CONSOLIDATED STATEMENTS OF CASH FLOWS
| Twelve Months | Twelve Months | |||||||
| ended | ended | |||||||
| July 31, 2017 | July 31, 2016 | |||||||
| Cash flows from operating activities: | ||||||||
| Net (loss) | $ | (19,852 | ) | $ | (28,411 | ) | ||
| Adjustments to reconcile net (loss) to net cash | ||||||||
| used by operating activities: | ||||||||
| Impairment | ||||||||
| Depreciation | 933 | 933 | ||||||
| Stock issued for service | ||||||||
| Changes in operating assets and liabilities: | ||||||||
| Increase/(decrease) in accounts payable | (929 | ) | 1,938 | |||||
| Increase/(decrease) in accrued interest to stockholders | 237 | - | ||||||
| Increase/(decrease) in advances from officer | ||||||||
| Net cash (used in) operating activities | (19,611 | ) | (25,540 | ) | ||||
| Cash flows from investing activities: | ||||||||
| Net cash (used in) investing activities | ||||||||
| Cash flows from financing activities: | ||||||||
| Capital contribution from stockholders | - | 22,500 | ||||||
| Loans from stockholders | 21,180 | - | ||||||
| Net cash provided by financing activities | 21,180 | 22,500 | ||||||
| Net increase (decrease) in cash and equivalents | 1,569 | (3,040 | ) | |||||
| Cash and equivalents at beginning of period | 359 | 3,399 | ||||||
| Cash and equivalents at end of period | $ | 1,928 | $ | 359 | ||||
| Supplemental Cash Flow Information | ||||||||
| Interest paid | $ | - | $ | - | ||||
| Income taxes paid | $ | - | $ | - | ||||
| Non-cash investing and financing activities: | $ | - | $ | - | ||||
| 2023 | 2022 | |||||||
| Years ended July 31, | ||||||||
| 2023 | 2022 | |||||||
| Net income (Loss) | $ | 396,903 | $ | (1,579,101 | ) | |||
| Other Comprehensive income, net of income tax | ||||||||
| Foreign currency translation adjustments | 238,454 | 267,073 | ||||||
| Total other comprehensive income | 238,454 | 267,073 | ||||||
| Less: total other comprehensive (loss) income attributable to noncontrolling interest | (18,670 | ) | 50,328 | |||||
| Total Other Comprehensive income Attributable to Hartford Great Health Corp | 257,124 | 216,745 | ||||||
| Total Comprehensive income (loss) | $ | 654,027 | $ | (1,362,356 | ) | |||
The accompanying notes are an integral part of these financial statements.
| 17 |
HARTFORD GREAT HEALTH CORP.
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS'STOCKHOLDERS’ EQUITY (DEFICIT)
for the years ended July 31, 20162023 and 2017
| Additional | Total | |||||||||||||||||||
| Common Stock | Paid - in | Accumulated | Stockholders' | |||||||||||||||||
| Shares | Amount | Capital | (Deficit) | Equity (Deficit) | ||||||||||||||||
| Balance, July 31 , 2015 | 3,018,000 | $ | 3,018 | $ | 260,613 | $ | (259,018 | ) | $ | 4,613 | ||||||||||
| Net (loss) for the period | - | - | - | (28,411 | ) | (28,411 | ) | |||||||||||||
| Additional paid in capital - related parties | - | - | 22,500 | - | 22,500 | |||||||||||||||
| Balance, July 31 , 2016 | 3,018,000 | $ | 3,018 | $ | 283,113 | $ | (287,429 | ) | $ | (1,298 | ) | |||||||||
| Net (loss) for the year | - | - | - | (19,852 | ) | (19,852 | ) | |||||||||||||
| Balance, July 31, 2017 | 3,018,000 | $ | 3,018 | $ | 283,113 | $ | 307,281 | $ | (21,150 | ) | ||||||||||
| 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, 2021 | 100,108,000 | 100,108 | 2,173,521 | (5,821,519 | ) | (233,487 | ) | (1,205,073 | ) | (4,986,450 | ) | |||||||||||||||||
| Net (loss) from continuing operations | - | - | - | (190,430 | ) | - | - | (190,430 | ) | |||||||||||||||||||
| Net (loss) from discontinued operations | - | - | - | (1,388,671 | ) | - | (193,481 | ) | (1,582,152 | ) | ||||||||||||||||||
| Investment from noncontrolling interest | - | - | - | - | - | 59,310 | 59,310 | |||||||||||||||||||||
| Foreign currency translation adjustment | - | - | - | - | 216,745 | 50,328 | 267,073 | |||||||||||||||||||||
| Balance, July 31, 2022 | 100,108,000 | 100,108 | 2,173,521 | (7,400,620 | ) | (16,742 | ) | (1,288,916 | ) | (6,432,649 | ) | |||||||||||||||||
| Balance | 100,108,000 | 100,108 | 2,173,521 | (7,400,620 | ) | (16,742 | ) | (1,288,916 | ) | (6,432,649 | ) | |||||||||||||||||
| Net income | - | - | - | 396,903 | - | - | 396,903 | |||||||||||||||||||||
| Net (loss) from continuing operations | - | - | - | 396,903 | - | - | 396,903 | |||||||||||||||||||||
| Disposal of subsidiaries | - | - | - | - | - | 1,307,586 | 1,307,586 | |||||||||||||||||||||
| Foreign currency translation adjustment | - | - | - | - | 257,124 | (18,670 | ) | 238,454 | ||||||||||||||||||||
| Balance, July 31, 2023 | 100,108,000 | 100,108 | 2,173,521 | (7,003,717 | ) | 240,382 | - | (4,489,706 | ) | |||||||||||||||||||
| Balance | 100,108,000 | 100,108 | 2,173,521 | (7,003,717 | ) | 240,382 | - | (4,489,706 | ) | |||||||||||||||||||
The accompanying notes are an integral part of these financial statements.
| 18 |
HARTFORD GREAT HEALTH CORP.
CONSOLIDATED STATEMENTS OF CASH FLOWS
| 2023 | 2022 | |||||||
| Years ended July 31, | ||||||||
| 2023 | 2022 | |||||||
| Cash flows from operating activities: | ||||||||
| Net income (loss) | $ | 396,903 | $ | (190,430 | ) | |||
| Adjustments to reconcile net income (loss) to net cash used in operating activities: | ||||||||
| Depreciation | 6,976 | - | ||||||
| Disposal of subsidiaries | (539,230 | ) | - | |||||
| Changes in operating assets and liabilities: | ||||||||
| Prepaid and Other current receivables | 827 | - | ||||||
| Related party receivables and payables | 17,789 | (2,500 | ) | |||||
| Other current payable | (6,628 | ) | 9,564 | |||||
| Net cash (used in) provided by operating activities from continuing operations | (123,363 | ) | (183,366 | ) | ||||
| Net cash used in operating activities from discontinued operations | - | (677,466 | ) | |||||
| Net cash used in operating activities | (123,363 | ) | (860,832 | ) | ||||
| Cash flows from investing activities: | ||||||||
| Disposal of subsidiaries | (4,938 | ) | - | |||||
| Net cash used in investing activities from continuing operations | (4,938 | ) | - | |||||
| Net cash used in investing activities from discontinued operations | - | (145,048 | ) | |||||
| Net cash used in investing activities | (4,938 | ) | (145,048 | ) | ||||
| Cash flows from financing activities: | ||||||||
| Proceeds of related party notes payable | 94,000 | 145,000 | ||||||
| Advances from related parties | 21,568 | 788,673 | ||||||
| Net cash provided by financing activities from continuing operations | 115,568 | 933,673 | ||||||
| Net cash provided by financing activities from discontinued operations | - | 38,594 | ||||||
| Net cash provided by financing activities | 115,568 | 972,267 | ||||||
| Effect of exchange rate changes on cash from continuing operations | (1,639 | ) | 830 | |||||
| Effect of exchange rate changes on cash from discontinued operations | - | (1,230 | ) | |||||
| Net change in Cash and cash equivalents from continuing operations | (14,372 | ) | 751,137 | |||||
| Net change in Cash and cash equivalents from discontinued operations | - | (785,150 | ) | |||||
| Cash and cash equivalents at beginning of period | 20,165 | 54,178 | ||||||
| Cash and cash equivalents at end of period | $ | 5,793 | 20,165 | * | ||||
| Supplemental Cash Flow Information | ||||||||
| Interest paid | $ | - | $ | - | ||||
| Income taxes paid | $ | 800 | $ | 800 | ||||
| ● | As of July 31, 2022, Cash and cash equivalents consisted $15,227 held by continuing operations and $4,938 held for sales which was included as current assets held for sale on balance sheet. |
The accompanying notes are an integral part of these financial statements.
| 19 |
HARTFORD GREAT HEALTH CORP.
Notes to Financial Statements
For the Years Ended July 31, 20172023 and 2016
NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
This summary of significant accounting policies is presented to assist in understanding the Company'sCompany’s financial statements. The financial statements and notes are the responsibility of the Company'sCompany’s management. These accounting policies conform to accounting principles generally accepted in the United States of America ("(“US GAAP"GAAP”) and have been consistently applied in the preparation of the financial statements.
Organization
Hartford Great Health Corp. was organized under the laws oforiginally incorporated in the State of Nevada on April 2, 2008. 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, see note 4 Acquisitions and Disposals.
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% 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% owned subsidiary, Shanghai HDFD Zhongli Education Technology Co., Ltd. (“Zhongli”), two individual investors hold the remaining 4% ownership, see note 4 Acquisitions and Disposals.
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 4 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 development stage since its formation and has not yet realized revenues from its planned operations. It plansconsolidation. The Company’s net income (loss) excludes income (loss) attributable to develop photographic sharing and networking through its website PhotoAmigo.com. The Company has chosen July 31 as its fiscal year-end.
Use of Estimates
Foreign Currency: The accounts of the Company’s foreign subsidiaries are translated in accordance with FASB ASC 830. Foreign currency transaction gains and losses are recognized in other expense, net, at the time they occur. Net foreign currency exchange gains or losses resulting from the translation of assets and liabilities of foreign subsidiaries whose functional currency is not the U.S. dollar are recorded as a part of accumulated other comprehensive loss in stockholders’ equity. The Company does not undertake hedging transactions to cover its foreign currency exposure.
Comprehensive Income (loss): For the year ended July 31, 2023 and 2022, the Company included its foreign currency translation gain or loss as part of its comprehensive income (loss).
Fair value measurement: Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Valuation techniques used to measure fair value must maximize the use of observable inputs and minimize the use of unobservable inputs. Accounting Standard Codification (“ASC”) 820, Fair Value Measurements and Disclosures (“ASC 820”), describes a fair value hierarchy based on three levels of inputs, of which the first two are considered observable and the last unobservable, that may be used to measure fair value, which are the following:
Level 1 - Quoted prices in active markets for identical assets or liabilities or funds.
Level 2 - Inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities.
Level 3 - Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities.
The Company’s financial instruments consist of cash and cash equivalents, accounts receivable, related party receivable, prepaid and other current receivable, accounts payable, related party payable and other current payable. The carrying amounts of afore-mentioned accounts approximate fair value because of their short-term nature.
| 20 |
Cash and Cash Equivalents
Property and equipment, net: Property and equipment, net, are stated at cost. Depreciation and amortization are computed using the straight-line method over the estimated useful lives of the assets. The estimated useful lives of property and equipment are as follows:
SCHEDULE OF PROPERTY AND EQUIPMENT USEFUL LIFE
| Years | ||
| Leasehold improvements | Lesser of lease term or estimated useful life | |
| ROU assets-Finance lease | Lease term | |
| Furniture and fixtures | 3-5 | |
| Office equipment and vehicles | 3-5 | |
| Computer software | 3-5 |
Expenditures for repairs and maintenance are charged to expense as incurred.
Business Combinations: If an acquired set of activities and assets is capable of being operated as a concentrationbusiness consisting of credit risk since it had no temporaryinputs and processes from the viewpoint of a market participant, the assets acquired and liabilities assumed are a business. Business combinations are accounted for using the acquisition method of accounting, which requires an acquirer to recognize the assets acquired and the liabilities assumed at the acquisition date measured at their fair values as of that date. Fair value determinations are based on discounted cash investmentsflow analyses or other valuation techniques. In determining the fair value of the assets acquired and liabilities assumed in bank accounts ina material acquisition, the Company may utilize appraisals from third party valuation firms to determine fair values of some or all of the assets acquired and liabilities assumed, or may complete some or all of the valuations internally. In either case, the Company takes full responsibility for the determination of the fair value of the assets acquired and liabilities assumed. The value of goodwill reflects the excess of the FDIC insured amounts.
Noncontrolling interest: The Company adopted ASC 810, Noncontrolling Interests in Consolidated Financial Instruments
Advertising costs: Advertising costs are expensed as incurred. When assets are retired or disposedDuring the year ended July 31, 2023 and 2022, amount of Nil and $10,540 advertising expenses were incurred, respectively.
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 related accumulated depreciation and amortization are removed from our general ledger, and the resulting gain or loss is reflected in the statement of operations. Depreciation of capital assets is provided over their estimated useful lives on a straight line basis
On December 22, 2017, the President of the deferredUnited States signed into law the Tax Reform Act. The Tax Reform Act permanently reduces the U.S. corporate income tax asset willrate from a maximum of 35% 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 be realized, the balancereceive any preferential tax treatment from local government. The Company has been in loss position for years and zero balances of tax provisions, deferred tax assets is reduced by a valuation allowance.and liabilities as of the reporting periods ended. The tax reforms have no significant impacts on the Company.
| 21 |
Revenue Recognition
| 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 year ended July 31, 2023. For the year ended July 31, 2022, $509,920 of revenue was 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 service is performedCovid-19 pandemic and collectability ofChinese 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 amount is reasonably assured. Certain insignificant amounts collected duringtwo-revenue-stream for the development, testing, and implementation phases are recorded as a recovery of development expense.
Recent Accounting Pronouncements.
Recently issued accounting pronouncements
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 has reviewed all recently issued, but not yet effective, accounting pronouncements and does not believeis evaluating the future adoptionimpact of any such pronouncements may be expected to cause a material impactthis guidance on its consolidated financial condition or the results of its operations.
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, PhotoAmigo's operations are in the development stage and it has incurred losses since inception, resulting in an accumulatedHartford Great Health Corp. had stockholders’ deficit of $307,281$4,489,706 and $6,432,649 and generated not enough/negative cash flows from operating activities as of and for the years ended July 31, 2017.2023 and 2022, respectively. These conditions raise substantial doubt about the ability of PhotoAmigoHartford 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 PhotoAmigo,Hartford Great Health Corp., and ultimately achieving profitable operations. Management believes that PhotoAmigo'sHartford Great Health Corp.’s business plan provides it with an opportunity to continue as a going concern. However, management cannot provide assurance that PhotoAmigoHartford 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 PhotoAmigoHartford Great Health Corp. to continue as a going concern.
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NOTE 3. STOCKHOLDERS'STOCKHOLDERS’ EQUITY
Preferred Stock
The Company hasis authorized to issue shares of preferred stock with a par value of $0.001. These$ per share. shares may beof preferred stock have been issued in seriesor outstanding since Inception (April 2, 2008).
Common Stock
The Company is authorized to issue shares of common stock with such rights and preferences as may be determined by the Boarda par value of Directors. Since inception,$ per share. On November 24, 2020, the Company has not issued any preferred shares.
NOTE 4. 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).
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 | ) | |
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The total assets and liabilities of Education and hospitality segments that were classified as held for sale on the twelve monthsCompany’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 | ||
The Pro Forma Condensed Consolidated Financial Statements for the years ended July 31, 20172022 and 2016, stockholders contributed $02021 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 Pro Forma Condensed Consolidated Statement of Operations for the years ended July 31, 2022 and $22,500, respectively. These contributions2021 give effect to the dispositions as if they had occurred on August 1, 2020, the beginning of the earliest period presented. The 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 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 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 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 Pro Forma Condensed Consolidated Financial Statements and accompanying notes should be read in connection with 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.
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PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
SCHEDULE OF PRO FORMA INFORMATION
| Historical | Operations | Operations | Historical | Operations | disposal | Operations | ||||||||||||||||||||||
| Year ended July 31, 2022 | Year ended July 31, 2021 | |||||||||||||||||||||||||||
| Recognition | ||||||||||||||||||||||||||||
| Less: | Pro Forma | Less: | of loss from | Pro Forma | ||||||||||||||||||||||||
| Discontinued | Continuing | Discontinued | subsidiaries | Continuing | ||||||||||||||||||||||||
| Historical | Operations | Operations | Historical | Operations | disposal | Operations | ||||||||||||||||||||||
| Tuition revenue | $ | 509,920 | 509,920 | $ | - | $ | 435,149 | 435,149 | - | $ | - | |||||||||||||||||
| Service revenue | 51,342 | 51,342 | - | 118,310 | 118,310 | - | - | |||||||||||||||||||||
| Total revenue | 561,262 | 561,262 | - | 553,459 | 553,459 | - | - | |||||||||||||||||||||
| Operating cost and expenses | ||||||||||||||||||||||||||||
| Cost of tuition revenue | 653,784 | 653,784 | - | 684,409 | 684,409 | - | - | |||||||||||||||||||||
| Cost of service revenue | 23,309 | 23,309 | - | 38,429 | 38,429 | - | - | |||||||||||||||||||||
| Cost of revenue | 677,093 | 677,093 | - | 722,838 | 722,838 | - | - | |||||||||||||||||||||
| Depreciation and amortization | 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 | |||||||||||||||||||||
| Goodwill impairment | - | - | 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 | |||||||||||||||||||||
| Operating Loss | (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 | ||||||||||||||||
| Gain (loss) on disposal of subsidiary | - | 104,317 | (53,056 | ) | 51,261 | |||||||||||||||||||||||
| Other income, net | 168,471 | 168,331 | 140 | 101,395 | 45,791 | 55,604 | ||||||||||||||||||||||
| Other income, net | 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 | ) | (2,760,611 | ) | (53,056 | ) | (133,984 | ) | ||||||||||||||
| Income Tax Expense | 800 | 800 | 800 | - | 800 | |||||||||||||||||||||||
| Net 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 | ) | (589,005 | ) | - | ||||||||||||||||||
| Net Loss Attributable to Hartford Great | ||||||||||||||||||||||||||||
| Health Corp | $ | (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 | $ | ) | $ | ) | $ | ) | $ | |||||||||||||||||||||
| Weighted average shares outstanding: | ||||||||||||||||||||||||||||
| Basic and diluted | ||||||||||||||||||||||||||||
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PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET
As of July 31, 2022
| Less: Discontinued | Pro Forma Continuing | |||||||||||
| Historical | Operations | Operations | ||||||||||
| ASSETS | ||||||||||||
| Current Assets | ||||||||||||
| Cash and cash equivalents | $ | 15,227 | $ | - | $ | 15,227 | ||||||
| Prepaid and Other current receivables | 1,154 | - | 1,154 | |||||||||
| Related party receivable | 14,233 | - | 14,233 | |||||||||
| Current assets held for sale | 4,499,736 | 4,499,736 | - | |||||||||
| Total Current Assets | 4,530,350 | 4,499,736 | 30,614 | |||||||||
| Non-current Assets | ||||||||||||
| Property and equipment, net | 8,006 | - | 8,006 | |||||||||
| Total Non-current Assets | 8,006 | - | 8,006 | |||||||||
| TOTAL ASSETS | $ | 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 | ||||||||
| Other current payable | 144,760 | - | 144,760 | |||||||||
| Current liabilities held for sale | 6,344,721 | 6,344,721 | - | |||||||||
| Total Current Liabilities | 10,971,005 | 6,344,721 | 4,626,284 | |||||||||
| TOTAL LIABILITIES | 10,971,005 | 6,344,721 | 4,626,284 | |||||||||
| Commitments and contingencies | - | |||||||||||
| Stockholders’ Equity (Deficit) | ||||||||||||
| Preferred stock - $ par value, shares authorized, shares issued and outstanding | - | - | ||||||||||
| Common stock - $ par value, shares authorized, shares outstanding at July 31, 2022. | 100,108 | 100,108 | ||||||||||
| Additional paid-in capital | 2,173,521 | 2,173,521 | ||||||||||
| Accumulated deficit | (7,400,620 | ) | (539,230 | ) | (6,861,390 | ) | ||||||
| Accumulated other comprehensive loss | (16,742 | ) | (16,839 | ) | 97 | |||||||
| Noncontrolling interest | (1,288,916 | ) | (1,288,916 | ) | - | |||||||
| Total Stockholders’ Deficit | (6,432,649 | ) | (1,844,985 | ) | (4,587,664 | ) | ||||||
| TOTAL LIABILITIES AND STOCKHOLDERS’ DEFICIT | $ | 4,538,356 | $ | 4,499,736 | $ | 38,620 | ||||||
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NOTE 5. RELATED PARTY TRANSACTIONS
Related Party Receivables
As of July 31, 2023, HFUS had $964 related party receivable due from SH Oversea in relation to the disposal consideration.
As of July 31, 2022, $428,519 related party receivables were allocated to current assets held for sales. See Note 4 Acquisitions and Disposals. The remaining related party receivable of $14,233 as of July 31, 2022, primarily represents the operating advances made to fund the Company's ongoing operationsaffiliates which are managed by the same management team. These advances do not bear interest and haveare considered due on demand
Related Party Payables and loans
As of July 31, 2023 and 2022, amounts of $586,236 and $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 $3,291,324 and $3,531,064 as of July 31, 2023 and 2022, respectively. The payable is funding support from SH Oversea for operation, bears no interest and due on demand.
HFUS 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. $17,789 and $11,857 of interest expenses were recorded during the year ended July 31, 2023 and 2022, respectively. As of July 31, 2023 and 2022, the unpaid principal and interest amount of $417,501 and $290,000, respectively, will be due on demand.
The remaining related party payable of $72,133 and $39,584 as of July 31, 2023 and 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, $1,321,549 related party payables were allocated to current liabilities held for sales. See Note 4 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 credited to additional paidincluded in capital.
NOTE 4. 6. COMMITMENTS AND CONTINGENCIES
There has been no material contractual obligations and commitments as of July 31, 2023.
NOTE 7. INCOME TAXES
We recorded income tax expense of $800 for both of the years ended July 31, 2023 and 2022, due to the loss position for the years since inception.
Hartford Great Health Corp.’s deferred tax assets, valuation allowance, and change in valuation allowance are as follows:
| Period Ending | Estimated NOL carry-forward | NOL expires | Estimated tax benefit from NOL and other tax benefits (20%) | Valuation allowance | Change in valuation allowance | Net tax asset | ||||||||||||||||||
| July 31, 2016 | $ | 269,370 | 2036 | $ | 53,900 | $ | (53,900 | ) | $ | (5,700 | ) | $ | - | |||||||||||
| July 31, 2017 | $ | 288,985 | 2037 | $ | 57,800 | $ | (57,800 | ) | $ | (3,900 | ) | $ | - | |||||||||||
SCHEDULE OF INCOME TAX VALUATION
| Estimated tax | ||||||||||||||||||||||||
| Net NOL | benefit from NOL and | Change in | Net | |||||||||||||||||||||
| carry- | NOL | other tax | Valuation | valuation | deferred | |||||||||||||||||||
| Period Ending | forward | expires | benefits ( | allowance | allowance | tax asset | ||||||||||||||||||
| 31-Jul-22 | $ | 7,400,620 | 2042 | $ | 2,220,186 | $ | (2,220,186 | ) | $ | (229,793 | ) | $ | - | |||||||||||
| 31-Jul-23 | $ | 7,003,717 | 2043 | $ | 2,101,115 | $ | (2,101,115 | ) | $ | 119,071 | $ | - | ||||||||||||
Income taxes at the statutory rate are reconciled to reported income tax expense (benefit) as follows:
| 2017 | 2016 | |||||||
| Income tax benefit at statutory rate | (20 | %) | (20 | %) | ||||
| Deferred income tax valuation allowance | 20 | % | 20 | % | ||||
| Reported tax rate | 0 | % | 0 | % | ||||
SCHEDULE OF EFFECTIVE INCOME TAX RATE RECONCILIATION
| 2023 | 2022 | |||||||
| Federal income tax rate | 21.0 | % | 21.0 | % | ||||
| State income tax rate | 8.8 | % | 8.8 | % | ||||
| Foreign tax difference | (4.8 | )% | (4.8 | )% | ||||
| Non-taxable item adjustment | -% | -% | ||||||
| GILTI | -% | -% | ||||||
| Valuation allowance | (25.0 | )% | (25.0 | )% | ||||
| Others | - | % | - | % | ||||
| Effective tax rate | 0.0 | % | 0.0 | % | ||||
At this time, the Company is unable to determine if it will be able to benefit from its deferred tax asset. There are limitations on the utilization of net operating loss carry-forwards, including a requirement that losses be offset against future taxable income, if any. In addition, there are limitations imposed by certain transactions which are deemed to be ownership changes. Accordingly, a full valuation allowance has been established for the entire deferred tax asset. Other temporary differences and estimated permanent differences are considered immaterial. Open tax years subject to examination by the IRS range from August 1, 20132018 to the present. The Company has no uncertain tax positions.
The Company has been in loss position for years since inception and zero balances of deferred tax assets and liabilities as of the twelve monthsreporting periods ended.
There was no GILTI tax for the Company for the years ended July 31, 2017,2023 and 2022 due to the Company borrowed $21,180 from four stockholders; $5,000 from each of three stockholders,operation losses incurred.
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NOTE 8. SEGMENT INFORMATION
Accounting Standards Codification (“ASC”) 280, “Segment Reporting,” requires public companies to report financial and $6,180 from the sole executive officer who is also a stockholder. The stockholders have not received any equity for these advances from stockholders which are expected to be repaid by the Company. Under the terms of the arrangement, simple interest accruesdescriptive information about their reportable operating segments. We identify our operating segments based on these advances at 2% annually. Principalhow our chief operating decision maker internally evaluates separate financial information, business activities and interest are due upon the sale of the company or upon demand. management responsibility.
The Company has accrued interestused 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 $237 for the twelve months endedoperating subsidiaries on August 1, 2022, we currently have one reportable segment.
Segment information on assets as of July 31, 2017 related to these advances. During2022 and revenue generated during the year ended July 31, 2016 there were not any advances from the stockholders and consequently there was no accrued interest related to these advances.
SCHEDULE OF SEGMENT INFORMATION
| Corporate and | ||||||||||||||||
| Hospitality | Education | Unallocated | ||||||||||||||
| (Discontinued | (Discontinued | (Continued | ||||||||||||||
| Operation) | Operation) | operation) | Total | |||||||||||||
| Revenue | $ | 51,342 | $ | 509,920 | $ | - | $ | 561,262 | ||||||||
| Operating loss | (129,352 | ) | (1,566,401 | ) | (177,913 | ) | (1,873,666 | ) | ||||||||
| Loss before tax | (182,980 | ) | (1,399,172 | ) | (189,630 | ) | (1,771,782 | ) | ||||||||
| Net Loss Attributable to Hartford Great Health Corp | (129,422 | ) | (1,259,249 | ) | (190,430 | ) | (1,579,101 | ) | ||||||||
| Total assets (excluding Intercompany balances) | 303,703 | 4,196,033 | 38,620 | 4,538,356 | ||||||||||||
| Assets allocated to held for sale | (303,703 | ) | (4,196,033 | ) | - | (4,499,736 | ) | |||||||||
NOTE 6. 9. SUBSEQUENT EVENTS
In accordance with ASC 855, "Subsequent Events"“Subsequent Events”, the Company has evaluated events subsequent to July 31, 2017events through the date of available issuance of these financial statements on November 7, 2017. During this period the Company did not have any material recognizableand no subsequent events.
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ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTATNSACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
Not Applicable.
Item 9A. 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 Annual Report. Based on that evaluation, our management, including our Chief Executive Officer and Chief Financial Officer, concluded that, as of July 31, 2017,2023, 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'sSEC’s rules and forms due to material weaknesses in our internal controls described below.
Management’s Annual Report on Internal Control Over Financial Reporting.
Our management is responsible for establishing and maintaining adequate internal control over financial reporting as defined in Exchange Act Rule 13a-15(f). Our internal control system is intended to provide reasonable assurance to our management and board of directors regarding the preparation and fair presentation of published financial statements and that we have controls and procedures designed to ensure that the information required to be disclosed by us in our reports that we will be required to file under the Exchange Act is accumulated and communicated to our management as appropriate to allow timely and informed decisions regarding financial disclosure.
Our management assessed the effectiveness of our internal control over financial reporting as of July 31, 2017.2023. Based on this assessment, management believes that as of July 31, 2017,2023, our internal control over financial reporting was not effective based on those criteria.
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. |
Inherent Limitations Over Internal Controls
Our management, including our Chief Executive Officer and Chief Financial Officer, does not expect that our disclosure controls and procedures or our internal controls will prevent all errors and all fraud. A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Our control systems are designed to provide such reasonable assurance of achieving their objectives. Further, the design of a control system must reflect the fact that there are resource constraints and the benefits of controls must be considered relative to their costs. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within our Company have been detected. These inherent limitations include, but are not limited to, the realities that judgments in decision-making can be faulty and that breakdowns can occur because of simple error or mistake. Additionally, controls can be circumvented by the individual acts of some persons, by collusion of two or more people, or by management override of the control. The design of any system of controls also is based in part upon certain assumptions about the likelihood of future events and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions. Over time, controls may become inadequate because of changes in conditions, or the degree of compliance with the policies or procedures may deteriorate. Because of the inherent limitations in a cost-effective control system, misstatements due to error or fraud may occur and not be detected.
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Changes in Internal Control Over Financial Reporting.
We have made no change in our internal control over financial reporting during the last fiscal quarteryear that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.
Attestation Report of the Registered Public Accounting Firm.
This annual report does not include an attestation report of our independent registered public accounting firm regarding internal control over financial reporting. Management'sManagement’s report was not subject to attestation by our independent registered public accounting firm pursuant to temporary rules of the SEC that permit us to provide only management'smanagement’s report in this annual report on Form 10-K.
ITEM 9B. OTHER INFORMATION
None.
PART III
ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
Directors and Executive Officers
The following individual presently serves as our sole officerofficers and director:
| Board | ||||||
| Name and | Position | |||||
| Municipality of Residence | Age | Positions With the Company | Held Since | |||
Robert Heckes Santa Barbara, CA | 51 | President, Chief Executive Officer, Chief Financial Officer and Director | 2008 |
| Board | ||||||
| Name and | Position | |||||
| Municipality of Residence | Age | Positions With the Company | Held Since | |||
| President, Chief Executive Officer | ||||||
| Rose Hong Wang Los Angeles, CA | 51 | and Director | 2021 | |||
| Chief Financial Officer, Secretary and | ||||||
| Sheng-Yih Chang Los Angeles, CA | 52 | Director | 2018 | |||
| Yuan Lu Shanghai, CHINA | 37 | Director | 2019 | |||
| Xin Dong Los Angeles, CA | 39 | Director | 2018 |
Each of the directors will serve until the next annual meeting of shareholdersstockholders of the Company and until his or hersuch director’s successor is elected and qualified or until hesuch director’s earlier death, resignation or removal. The following is information concerning the business backgrounds of each member of the board of directors:
Rose Hong Wang. From March 2018 to the present Ms. Wang has been Chief Financial Officer and Director of Hartford Hotel Investment Inc., Rosemead, CA, USA. In addition, since June 2010 to the present she resignshas been Vice President and Director of Shanghai Qiao Garden Group Overseas Branch, CA, USA. From September 2006 to May 2010 she was the Assistant General Manager of Qiao Garden Group Investment Inc., CA, USA, In December 1998 Ms. Wang immigrated to the USA. From December 1996 to September 1998, she was the Assistant General Manager of Shanghai Watanabe Asset Management Co., Ltd., China. From September 1993 thru July 1995, she Studied Language and Literature at Shanghai International Studies University, China. In July 1990, Ms. Wang received her Bachelor’s Degree with Music Major from Xinjiang Normal University, China.
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Sheng Yih Chang. Mr. Chang has served as the General Manager at Hartford Hotel, a commercial hotel in Rosemead California since March 2018. Mr. Chang served as a Product Manager at Jowett Group, a textile manufacturing company in the USA, from November 2015 through September 2017, as an Operational Manager and General Manager at A-Concepts Designs, a houseware supplier company in the USA, from January 2004 through October 2015, as a General Manager at Long Arch International, a carving crafts supplier in the USA, from December 2000 through December 2003, as a Sales Manager at EZ Wholesale, a general merchandise wholesaler in the USA, from July 1998 through November 2000, and as a technician at Richcom Computer Corporation, a computer service provider in China, from July 1996 through November 1997. Mr. Chang studied electrical engineering at the University of British Columbia and holds a Bachelor of Science in Electrical Engineering from California State University, Northridge.
Yuan Lu. Ms. Lu graduated in 2008 with a Bachelor’s Degree from Anhui University of Technology in China majoring in International Trade and Economics. In 2013, Ms. Lu earned a Master’s Degree in International Language Arts from Shanghai University of Finance and Economics in China. From 2008-2009, Ms. Lu was an Assistant Teacher at New Channel International Educated Group, Ltd. From 2009-2010, Ms. Lu was a Customs Broker and Procurement Buyer at Shanghai Pan-Resources Imp&Exp Co., Ltd. From 2010 through the present, Ms. Lu has served as the Assistant CEO at Shanghai Overseas Chinese Culture Media Co., Ltd.
Xin Dong. Mr. Dong has served as the Executive Director and General Manager of Shanghai Huitong Health Management Company, a senior care and traditional health management company, in China since September 2017. From July 2016 through August 2017, Mr. Dong acted as the Vice President and General Manager of Shanghai Huicai Financial Information Service Co., Ltd., a financial service and small loan company, in China. Mr. Dong has also served as the General Manager of Shenzhen Maoli International Trading Co., Ltd., an international trading company in Shenzhen, China, from April 2012 through June 2016, and as a Project Manager and Market Representative at Nanjing Hongyuan Electronic Technology Company, an electronics manufacturing company, from July 2007 through March 2012. Mr. Dong holds a Masters in International Finance and Trade from Shanghai Jiaotong University and a degree in Computer Science from Jiangsu University.
Term of office
All officers and directors listed above will remain in office until the next annual meeting of our stockholders, and until their successors have been duly elected and qualified or is removed. Our soleuntil removed from office in accordance with our bylaws. There are no agreements with respect to the election of Directors. We have not compensated our Directors for service on our Board of Directors, any committee thereof, or reimbursed for expenses incurred for attendance at meetings of our Board of Directors and/or any committee of our Board of Directors. Officers are appointed annually by our Board of Directors and each Executive Officer serves at the willdiscretion of our Board of Directors.
None of our Officers and/or Directors have filed any bankruptcy petition, been convicted of or been the subject of any criminal proceedings or the subject of any order, judgment or decree involving the violation of any state or federal securities laws within the past five (5) years.
Director Independence
The Board consists of four members, of which Yuan Lu and Xin Dong meet the independence requirements of the Nasdaq Stock Market as currently in effect.
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Committees and Terms
The Board of Directors (the “Board”) has not established any committees. The Company will notify its shareholders for an annual shareholder meeting and that they may present proposals for inclusion in the Company’s proxy statement to be mailed in connection with any such annual meeting; such proposals must be received by the Company at least 90 days prior to the meeting. No other specific policy has been adopted in regard to the inclusion of shareholder nominations to the Board of Directors.
Code of Ethics
To date, we have not adopted a standing Audit, CompensationCode of Ethics applicable to our principal executive officer and Nominating Committeeprincipal financial officer because the Company has no meaningful operations within the United States of America. The Company does not believe that a formal written code of ethics is necessary at this time. We expect that the Company will adopt a code of ethics if and when the Company successfully completes a business combination that results in the acquisition of an on-going business and thereby commences operations within the United States.
ITEM 11. EXECUTIVE COMPENSATION
No officer or director has received annual compensation since April 2, 2008 (Inception).
Employment Agreements
As of July 31, 2023, all employees and officers in China have entered into employment agreements with the Company’s subsidiaries. However, the Company has not entered into employment agreements with any of its executive officers in the US as of July 31, 2023.
Anticipated Officer and Director Remuneration
During the year ended July 31, 2023, the Company has not paid any compensation owed to any officer or director. The Company intends to begin to pay annual salaries to all its officers and will pay an annual stipend to its directors when, and if, it completes a primary public offering for the sale of securities and/or the Company reaches profitability, experiences positive cash flow and/or obtains additional funding. At such time, the Company anticipates offering cash and non-cash compensation to officers and directors. In addition, although not presently offered, the Company anticipates that its officers and directors will be provided with a group health, vision and dental insurance program at subsidizes rates, or at the sole expense of the Company, as may be determined on a case-by-case basis by the Company in its sole discretion.
Stock Option Plan
We do not have a stock option plan and we have not issued any warrants, options or other rights to acquire our securities. However, we may adopt an incentive and non-statutory stock option plan in the future.
Employee Pension, Profit Sharing or other Retirement Plans
We do not have a defined benefit, pension plan, profit sharing or other retirement plan, although we may adopt one or more of such plans in the future.
Section 16(a) Beneficial Ownership Reporting Compliance
We are not registered under the Securities Exchange Act of 1934, as amended, and are not subject to the reporting requirements of Section 16(a).
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ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS
As of October 25, 2017,30, 2023, there are a total of 3,018,000100,108,000 shares of our common stock outstanding, our only class of voting securities currently outstanding. The following table describes the ownership of our voting securities by: (i) each of our officers and directors; (ii) all of our officers and directors as a group; and (iii) each shareholder known to us to own beneficially more than 5% of our common stock. All ownership is direct, unless otherwise stated.
| Name and Address of | Shares Beneficially Owned | Percentage | ||||||
| Beneficial Owner | Number | (%) | ||||||
Hillel of Colorado 2240 E. Wesley Denver, CO 80210 | 899,167 | 29 | % | |||||
| Robert Heckes(1) | 604,167 | 20 | % | |||||
| 2532 Foothill Rd. | ||||||||
| Santa Barbara, CA 93105 | ||||||||
| Iliff Street Capital, LLC | 459,166 | 15 | % | |||||
Jennifer Frenkel, Sole Member 2340 South Columbine Street | ||||||||
| Denver, CO 80210 | ||||||||
Underwood Family Partners, LTD L. Michael Underwood, General Partner 5 Eagle Pointe Lane Castle Rock, CO 80101 | 593,500 | 20 | % | |||||
| Shares | ||||||||||
| Beneficially | Percentage | |||||||||
| Name of Beneficial Owner | Address of Beneficial Owner | Owned Number | (%) | |||||||
| RM 3806 218 WUSONG RD, HONGKOU DISTRICT | ||||||||||
| YUAN LU | SHANGHAI, CHINA | 32,440,000 | 32.4 | % | ||||||
| ROSE HONG WANG | 729 CARRIAGE HOUSE DRIVE, ARCADIA, CA 91006 | 11,000,000 | 11.0 | % | ||||||
| XIN DONG | 8832 GLENDON WAY, ROSEMEAD, CA 91770 | 2,400,000 | 2.4 | % | ||||||
| SHENG-YIH CHANG | 8832 GLENDON WAY, ROSEMEAD, CA 91770 | 1,000,000 | 1.0 | % | ||||||
| Total Officers and Directors (4) | 46,840,000 | 46.8 | % | |||||||
Each shareholder known to us to own beneficially more than 5% of our common stock:
| Shares | ||||||||||
| Beneficially | Percentage | |||||||||
| Name of Beneficial Owner | Address of Beneficial Owner | Owned Number | (%) | |||||||
| LIANYUE SONG | 8832 GLENDON WAY, ROSEMEAD, CA 91770 | 20,000,000.00 | 20.0 | % | ||||||
| RM 218 WUSONG ROAD, HONGKOU DISTRICT, | ||||||||||
| DANFENG GU | SHANGHAI, CHINA | 8,300,000.00 | 8.3 | % | ||||||
| 1F QIAO GARDEN 73 WUHUA RD, HONGKOU | ||||||||||
| JIAMIN ZHU | DISTRICT, SHANGHAI, CHINA | 8,000,000.00 | 8.0 | % | ||||||
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE
US office space is provided to PhotoAmigoHartford Great Health Corp. at no additional 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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ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICES
The following table sets forth fees billed by our principal accounting firms of Prichett, Siler and Hardy, P.C.Simon & Edward, LLP in the last two years ended July 31, 2017:
| 2017 | 2016 | |||||||
| Audit Fees | $ | 9,000 | $ | 9,100 | ||||
| Audit Related Fees | 2,138 | 3,300 | ||||||
| Tax Fees | 0 | 0 | ||||||
| All Other Fees | 0 | 0 | ||||||
| Total Fees | $ | 11,138 | $ | 12,400 | ||||
| 2023 | 2022 | |||||||
| Audit Fees | $ | 10,500 | $ | 26,000 | ||||
| Audit Related Fees | 7,500 | 13,500 | ||||||
| All other fees | - | - | ||||||
| Total Fees | $ | 18,000 | $ | 39,500 | ||||
It is the policy of our Board of Directors to engage the principal accounting firm selected to conduct the financial audit for our company and to confirm, prior to such engagement, that such principal accounting firm is independent of our company. All services of the principal accounting firm reflected above were approved by the Board of Directors.
PART IV
ITEM 15. EXHIBITS
The following documents are filed as part of this Annual Report:
| 1. | Consolidated Financial Statements |
Our consolidated financial statements are listed under Part II, Item 8, of this Annual Report.
| 2. | Financial Statement Schedules |
All financial statement schedules have been omitted because they are not required or are not applicable, or the required information is shown in our Consolidated Financial Statements or the notes thereto.
| 3. | Exhibits |
The following exhibits are filed with or incorporated by referenced in this report:
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 Files
* Filed herewith
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SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
| HARTFORD GREAT HEALTH CORP. | ||
| Date: October 30, 2023 | By: | /s/ ROSE HONG WANG |
| Chief Executive Officer | ||
Pursuant to the requirements of the Securities Exchange Act of 1934 this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.
| Name | Title | Date | |||
| /s/ Rose Hong Wang | Chief Executive Officer, President, Dir. | October 30, 2023 | |||
| Rose Hong Wang | (Principal Executive Officer) | ||||
| /s/ Sheng-Yih Chang | Chief Financial Officer | October 30, 2023 | |||
| Sheng-Yih Chang | (Principal Accounting Officer) | ||||
| /s/ Yuan Lu | Director | October 30, 2023 | |||
| Yuan Lu | |||||
| Director | October 30, 2023 | ||||
| Xin Dong | |||||
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