UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended: ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE EXCHANGE ACT For the transition period from Commission File Number: HARTFORD GREAT HEALTH CORP. (Exact Name of Registrant as Specified in its Charter) Nevada (State or other jurisdiction of incorporation or organization) 51-0675116 (I.R.S. Employer Identification Number) 8832 Glendon Way, Rosemead, California91770 (Address of Principal Executive Offices) (Zip Code) Registrant’s telephone number including area code: Former name, former address, and former fiscal year, if changed since last report Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes☒ No ☐ Indicate by check mark whether the registrant has submitted electronically, Indicate by checkmark whether the registrant is a large accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐ Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes Securities registered pursuant to Section 12(b) of the Act: State the number of shares outstanding of each of the (Mark One)☒QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934January 31, 2018☐TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE EXCHANGE ACT____________ to ________333-164633PHOTOAMIGO, INC.NEVADA20-5422795(State or other jurisdiction of incorporation or organization) (I.R.S. Employer Identification Number)2532 Foothill Road, Santa Barbara, CA. 93105Registrant's(805) 272-0874and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files)."large“large accelerated filer," "accelerated filer"” “accelerated filer” and "smaller“smaller reporting company"company” in Rule 12b-2 of the Exchange Act.Large accelerated filer ☐ Accelerated filer ☐Non-accelerated filer ☐ Smaller reporting company ☒Emerging growth company ☐Large accelerated filer ☐ Accelerated filer ☐ Non-accelerated filer ☐ Smaller reporting company ☒ Emerging growth company ☒ x ☐ No☐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 issuer'sissuer’s classes of common equity, as of the latest practicable date: 3,018,000 shares of common stock outstanding as of March 13, 2018.
Index
| 2 |
HARTFORD GREAT HEALTH CORP.
CONDENSED CONSOLIDATED BALANCE SHEETS
| January 31, 2018 | July 31, 2017 | |||||||
| (unaudited) | ||||||||
| ASSETS | ||||||||
| Current assets: | ||||||||
| Cash and cash equivalents | $ | 1,117 | $ | 1,928 | ||||
| Total current assets | 1,117 | 1,928 | ||||||
| Fixed Assets | ||||||||
| Computer equipment | 2,792 | 2,792 | ||||||
| Accumulated depreciation | (2,732 | ) | (2,262 | ) | ||||
| Net book value | 60 | 530 | ||||||
| Total assets | $ | 1,177 | $ | 2,458 | ||||
| LIABILITIES AND STOCKHOLDERS' DEFICIT | ||||||||
| Current liabilities: | ||||||||
| Accounts payable | $ | 1,810 | $ | 2,191 | ||||
| Accrued Interest | 494 | 237 | ||||||
| Advances from shareholders | 33,843 | 21,180 | ||||||
| Total current liabilities | 36,147 | 23,608 | ||||||
| Total liabilities | 36,147 | 23,608 | ||||||
| Commitments and contingencies (Notes 2 and 4) | ||||||||
| Stockholders' 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) | (321,101 | ) | (307,281 | ) | ||||
| Total stockholders' deficit | (34,970 | ) | (21,150 | ) | ||||
| Total liabilities and stockholders' deficit | $ | 1,177 | $ | 2,458 | ||||
| April 30, 2023 | July 31, 2022 | |||||||
| (Unaudited) | ||||||||
| ASSETS | ||||||||
| Current Assets | ||||||||
| Cash and cash equivalents | $ | 15,569 | $ | 15,227 | ||||
| Prepaid and Other current receivables | 289 | 1,154 | ||||||
| 60,774 | 14,233 | |||||||
| Current assets held for sale | - | 4,499,736 | ||||||
| Total Current Assets | 76,632 | 4,530,350 | ||||||
| Non-current Assets | ||||||||
| Property and equipment, net | 7,812 | 8,006 | ||||||
| Total Non-current Assets | 7,812 | 8,006 | ||||||
| TOTAL ASSETS | $ | 84,444 | $ | 4,538,356 | ||||
| LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||||
| Current Liabilities | ||||||||
| $ | 4,543,433 | $ | 4,481,524 | |||||
| Other current payable | 134,623 | 144,760 | ||||||
| Current liabilities held for sale | - | 6,344,721 | ||||||
| Total Current Liabilities | 4,678,056 | 10,971,005 | ||||||
| TOTAL LIABILITIES | 4,678,056 | 10,971,005 | ||||||
| Commitments and contingencies (Note 5) | - | - | ||||||
| Stockholders’ Equity (Deficit) | ||||||||
| Preferred stock - $ par value, shares authorized, shares issued and outstanding | - | - | ||||||
| Common stock - $ par value, shares authorized, shares outstanding at both of April 30, 2023 and July 31, 2022. | 100,108 | 100,108 | ||||||
| Additional paid-in capital | 2,173,521 | 2,173,521 | ||||||
| Accumulated deficit | (6,971,862 | ) | (7,400,620 | ) | ||||
| Accumulated other comprehensive loss | 104,621 | (16,742 | ) | |||||
| Noncontrolling interest | - | (1,288,916 | ) | |||||
| Total Stockholders’ Deficit | (4,593,612 | ) | (6,432,649 | ) | ||||
| TOTAL LIABILITIES AND STOCKHOLDERS’ DEFICIT | $ | 84,444 | $ | 4,538,356 | ||||
The accompanying notes are an integral part of these condensed consolidated unaudited financial statements.
| 3 |
HARTFORD GREAT HEALTH CORP.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
| Three Months | Three Months | Six Months | Six Months | |||||||||||||
| ended | ended | ended | ended | |||||||||||||
| January 31, 2018 | January 31, 2017 | January 31, 2018 | January 31, 2017 | |||||||||||||
| Revenues | $ | - | $ | - | $ | - | $ | - | ||||||||
| Operating expenses: | ||||||||||||||||
| Website development | 2,448 | 589 | 2,625 | 766 | ||||||||||||
| Legal and accounting fees | 7,450 | 4,500 | 8,237 | 5,175 | ||||||||||||
| Investor relations | 1,751 | 1,950 | 2,051 | 2,908 | ||||||||||||
| Other general and administrative | 103 | 3 | 180 | 34 | ||||||||||||
| Depreciation Expense | 235 | 235 | 470 | 470 | ||||||||||||
| Total operating expenses | 11,987 | 7,277 | 13,563 | 9,353 | ||||||||||||
| Operating (loss) | (11,987 | ) | (7,277 | ) | (13,563 | ) | (9,353 | ) | ||||||||
| Other income(expense): | ||||||||||||||||
| Interest expense | (150 | ) | (45 | ) | (257 | ) | (59 | ) | ||||||||
| Other income (expense) net | (150 | ) | (45 | ) | (257 | ) | (59 | ) | ||||||||
| Net (loss) | $ | (12,137 | ) | $ | (7,322 | ) | $ | (13,820 | ) | $ | (9,412 | ) | ||||
| Net (loss) per common share: | ||||||||||||||||
| Basic and Diluted * | $ | - | $ | - | $ | - | $ | - | ||||||||
| Weighted average shares outstanding: | ||||||||||||||||
| Basic and Diluted | 3,018,000 | 3,018,000 | 3,018,000 | 3,018,000 | ||||||||||||
| 2023 | 2022 | 2023 | 2022 | |||||||||||||
| Three months ended | Nine months ended | |||||||||||||||
| April 30, | April 30, | |||||||||||||||
| 2023 | 2022 | 2023 | 2022 | |||||||||||||
| Operating expenses | ||||||||||||||||
| Selling, general and administrative | 21,417 | 38,655 | 97,427 | 143,322 | ||||||||||||
| Operating Loss | (21,417 | ) | (38,655 | ) | (97,427 | ) | (143,322 | ) | ||||||||
| Other Income (Expense) | ||||||||||||||||
| Interest (expense), net | (4,776 | ) | (3,079 | ) | (12,954 | ) | (8,287 | ) | ||||||||
| Gain on disposal of subsidiary | - | - | 539,230 | - | ||||||||||||
| Other income (expense), net | - | - | (91 | ) | 140 | |||||||||||
| Other (expense) income, net | (4,776 | ) | (3,079 | ) | 526,185 | (8,147 | ) | |||||||||
| (Loss) income before income taxes | (26,193 | ) | (41,734 | ) | 428,758 | (151,469 | ) | |||||||||
| Income Tax Expense | - | 800 | - | 800 | ||||||||||||
| Net (loss) income from continuing operations | (26,193 | ) | (42,534 | ) | 428,758 | (152,269 | ) | |||||||||
| Loss from discontinued operations, net of tax | - | (400,822 | ) | - | (1,522,444 | ) | ||||||||||
| Net (loss) income | (26,193 | ) | (443,356 | ) | 428,758 | (1,674,713 | ) | |||||||||
| Less: net loss attributable to noncontrolling Interest from discontinued operations | - | (48,090 | ) | - | (177,817 | ) | ||||||||||
| Net (loss) income attributable to Hartford Great Health Corp | $ | (26,193 | ) | $ | (395,266 | ) | $ | 428,758 | $ | (1,496,896 | ) | |||||
| Amounts attributable to Hartford Great Health Corp: | ||||||||||||||||
| Continuing operations | (26,193 | ) | (42,534 | ) | 428,758 | (152,269 | ) | |||||||||
| Discontinued operations | - | (352,732 | ) | - | (1,344,627 | ) | ||||||||||
| Net (loss) income attributable to Hartford Great Health Corp | $ | (26,193 | ) | $ | (395,266 | ) | $ | 428,758 | $ | (1,496,896 | ) | |||||
| Net (loss) income per share from continuing operations attributable to Hartford Great Health Corp | $ | (0.00 | ) | $ | (0.00 | ) | $ | 0.00 | $ | (0.00 | ) | |||||
| Net (loss) income per share from discontinued operations attributable to Hartford Great Health Corp | $ | - | $ | (0.00 | ) | $ | - | $ | (0.01 | ) | ||||||
| Net loss per common share: | ||||||||||||||||
| Basic and Diluted | $ | (0.00 | ) | $ | (0.00 | ) | $ | 0.00 | $ | (0.01 | ) | |||||
| Weighted average shares outstanding: | ||||||||||||||||
| Basic and diluted | 100,108,000 | 100,108,000 | 100,108,000 | 100,108,000 | ||||||||||||
The accompanying notes are an integral part of these condensed consolidated unaudited financial statements.
| 4 |
HARTFORD GREAT HEALTH CORP.
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY (DEFICIT)
| Additional | Total | |||||||||||||||||||
| Common Stock | Paid - in | Accumulated | Stockholders' | |||||||||||||||||
| Shares | Amount | Capital | (Deficit) | Equity (Deficit) | ||||||||||||||||
| Balance, July 31 , 2017 | 3,018,000 | 3,018 | 283,113 | (307,281 | ) | (21,150 | ) | |||||||||||||
| Net (loss) for the period | - | - | - | (13,820 | ) | (13,820 | ) | |||||||||||||
| Balance, January 31 , 2018 | 3,018,000 | 3,018 | $ | 283,113 | $ | (321,101 | ) | $ | (34,970 | ) | ||||||||||
| 2023 | 2022 | 2023 | 2022 | |||||||||||||
| Three months ended | Nine months ended | |||||||||||||||
| April 30, | April 30, | |||||||||||||||
| 2023 | 2022 | 2023 | 2022 | |||||||||||||
| Net (loss) income | $ | (26,193 | ) | $ | (395,266 | ) | $ | 428,758 | $ | (1,496,896 | ) | |||||
| Other Comprehensive income (loss), net of income tax | ||||||||||||||||
| Foreign currency translation adjustments | 98,074 | 242,246 | 121,363 | 156,631 | ||||||||||||
| Total other comprehensive loss | 98,074 | 242,246 | 121,363 | 156,631 | ||||||||||||
| Less： total other comprehensive loss attributable to noncontrolling interest | - | 44,999 | - | 28,905 | ||||||||||||
| Total Other Comprehensive Loss Attributable to Hartford Great Health Corp | 98,074 | 197,247 | 121,363 | 127,726 | ||||||||||||
| Total Comprehensive (Income) Loss | $ | 71,881 | $ | (198,019 | ) | $ | 550,121 | $ | (1,369,170 | ) | ||||||
The accompanying notes are an integral part of these condensed consolidated unaudited financial statements.
| 5 |
HARTFORD GREAT HEALTH CORP.
CONSOLIDATED STATEMENT OF CASH FLOWS
| Six Months | Six Months | |||||||
| ended | ended | |||||||
| January 31, 2018 | January 31, 2017 | |||||||
| Cash flows from operating activities: | ||||||||
| Net (loss) | $ | (13,820 | ) | $ | (9,412 | ) | ||
| Adjustments to reconcile net (loss) to net cash | ||||||||
| used by operating activities: | ||||||||
| Depreciation | 470 | 470 | ||||||
| Changes in operating assets and liabilities: | ||||||||
| Increase/(decrease) in accounts payable | (381 | ) | 42 | |||||
| Increase/(decrease) in interest payable | 257 | 59 | ||||||
| Net cash (used in) operating activities | (13,474 | ) | (8,841 | ) | ||||
| Cash flows from investing activities: | ||||||||
| Net cash (used in) investing activities | 0 | 0 | ||||||
| Cash flows from financing activities: | ||||||||
| Loans from shareholders | 12,663 | 9,980 | ||||||
| Net cash provided by financing activities | 12,663 | 9,980 | ||||||
| Net increase (decrease) in cash and equivalents | (811 | ) | 1,139 | |||||
| Cash and equivalents at beginning of period | 1,928 | 359 | ||||||
| Cash and equivalents at end of period | $ | 1,117 | $ | 1,498 | ||||
| Supplemental Cash Flow Information | ||||||||
| Interest paid | $ | - | $ | - | ||||
| Income taxes paid | $ | - | $ | - | ||||
| Shares | Amount | Capital | (Deficit) | loss | Interest | (Deficit) | ||||||||||||||||||||||
| Accumulated | Total | |||||||||||||||||||||||||||
| Additional | Other | Stockholders’ | ||||||||||||||||||||||||||
| Common Stock | Paid - in | Accumulated | Comprehensive | Noncontrolling | Equity | |||||||||||||||||||||||
| Shares | Amount | Capital | (Deficit) | loss | Interest | (Deficit) | ||||||||||||||||||||||
| Balance, July 31, 2022 | 100,108,000 | 100,108 | 2,173,521 | (7,400,620 | ) | (16,742 | ) | (1,288,916 | ) | (6,432,649 | ) | |||||||||||||||||
| Net income (loss) from continuing operations | - | - | - | 428,758 | - | - | 428,758 | |||||||||||||||||||||
| Disposal of subsidiary | - | - | - | - | - | 1,307,586 | 1,307,586 | |||||||||||||||||||||
| Foreign currency translation adjustment | - | - | - | - | 121,363 | (18,670 | ) | 102,693 | ||||||||||||||||||||
| Balance, April 30, 2023 (unaudited) | 100,108,000 | 100,108 | 2,173,521 | (6,971,862 | ) | 104,621 | - | (4,593,612 | ) | |||||||||||||||||||
| Accumulated | Total | |||||||||||||||||||||||||||
| 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 | - | - | - | (152,269 | ) | - | - | (152,269 | ) | |||||||||||||||||||
| Net (loss) from discontinued operations | - | - | - | (1,344,627 | ) | - | (177,817 | ) | (1,522,444 | ) | ||||||||||||||||||
| Investment from noncontrolling interest | - | - | - | - | - | 60,528 | 60,528 | |||||||||||||||||||||
| Foreign currency translation adjustment | - | - | - | - | 127,726 | 28,905 | 156,631 | |||||||||||||||||||||
| Balance, April 30, 2022 (unaudited) | 100,108,000 | 100,108 | 2,173,521 | (7,318,415 | ) | (105,761 | ) | (1,293,457 | ) | (6,444,004 | ) | |||||||||||||||||
The accompanying notes are an integral part of these condensed consolidated unaudited financial statements.
| 6 |
HARTFORD GREAT HEALTH CORP.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
| Nine months ended | ||||||||
| April 30, | ||||||||
| 2023 | 2022 | |||||||
| Cash flows from operating activities: | ||||||||
| Net income (loss) | $ | 428,758 | (152,269 | ) | ||||
| Adjustments to reconcile net income (loss) to net cash used in operating activities: | ||||||||
| Disposal of subsidiaries | (539,230 | ) | - | |||||
| Changes in operating assets and liabilities: | ||||||||
| Prepaid and Other current receivables | 832 | - | ||||||
| Related party receivables and payables | 33,211 | 20,476 | ||||||
| Other current payable | (6,654 | ) | 6,065 | |||||
| Net cash (used in) provided by operating activities from continuing operations | (83,083 | ) | (125,728 | ) | ||||
| Net cash used in operating activities from discontinued operations | - | (915,303 | ) | |||||
| Net cash used in operating activities | (83,083 | ) | (1,041,031 | ) | ||||
| Cash flows from investing activities: | ||||||||
| Net cash used in investing activities from continuing operations | - | - | ||||||
| Net cash used in investing activities from discontinued operations | - | (174,277 | ) | |||||
| Net cash used in investing activities | - | (174,277 | ) | |||||
| Cash flows from financing activities: | ||||||||
| Proceeds of related party notes payable | 85,000 | 120,000 | ||||||
| Advances from related parties | - | 1,018,395 | ||||||
| Net cash provided by financing activities from continuing operations | 85,000 | 1,138,395 | ||||||
| Net cash provided by financing activities from discontinued operations | - | 39,068 | ||||||
| Net cash provided by financing activities | 85,000 | 1,177,463 | ||||||
| Effect of exchange rate changes on cash from continuing operations | (1,575 | ) | (244 | ) | ||||
| Effect of exchange rate changes on cash from discontinued operations | - | 331 | ||||||
| Net change in Cash, cash equivalents and restricted cash from continuing operations | 342 | 1,012,423 | ||||||
| Net change in Cash, cash equivalents and restricted cash from discontinued operations | - | (1,050,181 | ) | |||||
| Cash, cash equivalents and restricted cash at beginning of period | 15,227 | 54,178 | ||||||
| Cash, cash equivalents and restricted cash at end of period | $ | 15,569 | 16,420 | |||||
| Supplemental Cash Flow Information | ||||||||
| Interest paid | $ | - | - | |||||
| Income taxes paid | $ | - | - | |||||
The accompanying notes are an integral part of these condensed consolidated unaudited financial statements.
| 7 |
HARTFORD GREAT HEALTH CORP. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
This summary of significant accounting policies is presented to assist in understanding the six month periods ended January 31, 2018Company’s financial statements. The financial statements and 2017
Organization
Hartford Great Health Corp. was originally incorporated in the State of Nevada on April 2, 2008 under the name PhotoAmigo, Inc. It changed its name to Hartford Great Health Corp. on August 22, 2018 and since then we have been engaged in activities to formulate and implement our business plans.
Through its wholly owned subsidiary - Hangzhou Hartford Comprehensive Health Management, Ltd (“HZHF) and HZHF’s 60 percent owned subsidiary - Hangzhou Longjing Qiao Fu Vacation Hotel Co., Ltd. (“HZLJ”), and through Shanghai Hartford Comprehensive Health Management, Ltd. (“HFSH”) and its 90 percent owned subsidiary - Shanghai Qiao Garden International Travel Agency (“Qiao Garden Int’l Travel”), the Company engages in hospitality industry in China. Qiao Garden Int’l Travel was disposed on December 31, 2020.
The Company started to engage in early childhood education industry at Hartford International Education Technology Co., Ltd (“HF Int’l Education”). On July 24, 2019 and March 23, 2020, HF Int’l Education established two 100% 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.
Impacted by the government regulation implemented in education industry and the notes thereto includedrestrictions posted by the Chinese government to control the pandemic in China since 2021, to avoid further operation losses, on August 1, 2022, HFSH entered a contract with a related party, Shanghai Oversea Chinese Culture Media Ltd. (“SH Oversea”), to sell 90 percent ownership of HF Int’l Education and its subsidiaries for $900 (RMB 5,850). On August 1, 2022, HFUS entered a contract with SH Oversea and another individual, to sell 100 percent ownership of HZHF and its subsidiaries for $1,000 (RMB 6,500). See Note 3 Acquisitions and Disposals.
Basis of Presentation
The consolidated financial statements include the accounts of Hartford Great Health Corp, its wholly-owned subsidiaries and subsidiaries in which it has a controlling interest. The Company reports noncontrolling interests of the consolidated entities as a component of equity separate from the Company’s equity. All material inter-company transactions between and among the Company and its consolidated subsidiaries have been eliminated in the Company's Form 10-K.
Use of Estimates:
The preparation of financial statements in conformity with US GAAP requires the Company'sCompany’s management to make estimates and assumptions that affect the amounts of assets and liabilities, the identification and disclosure of impaired assets and contingent liabilities at the date of the financial statements, and the reported amounts of expenses during the reporting period. Actual results could differ from those estimates.
Reclassifications
Certain amounts on the prior-year consolidated balance sheet, consolidated statement of operations and cash flows were reclassified to conform to current-year presentation, with no effect on ending stockholders’ equity.
| 8 |
Income Taxes:
The Company accounts for income taxes using the asset and liability method in accordance with ASC 740, Accounting for Income Taxes. The asset and liability method provides that deferred tax assets and liabilities are recognized for the expected future tax consequences of temporary differences between the financial reporting and tax bases of assets and liabilities, and for operating loss and tax credit carryforwards.carry forwards. Deferred tax assets and liabilities are measured using the currently enacted tax rates and laws that will be in effect when the differences are expected to reverse. The Company records a valuation allowance to reduce deferred tax assets to the amount that is believed more likely than not to be realized.
The Tax Reform Act permanently reduces the U.S. corporate income tax rate to a flat 21% rate, effective January 1, 2018. In addition, the 2017 Tax Act also creates a new requirement that certain income (i.e., Global Intangible Low-Taxed Income (“GILTI”)) earned by controlled foreign corporations (“CFCs”) must be included in the gross income of the CFCs’ U.S. shareholder income. The tax law in PRC applies an income tax rate of 25% to all enterprises. The Company’s subsidiary does not receive any preferential tax treatment from local government. The Company has been in loss position for years and zero amount of tax provisions, including GILTI. Deferred tax assets as of the reporting periods ended were fully reserved for valuation allowance as they are more likely than not to be realized.
Revenue Recognition
The Company adopted ASC Topic 606 Revenue from Contracts with Customers (“Topic 606) on August 1, 2019, applying the modified retrospective method to all contracts that were not completed as of August 1, 2019. Revenue is recognized when control of promised goods or services is transferred to our customers in an amount of consideration to which we expect to be entitled to in exchange for those goods or services. We follow the five steps approach for revenue recognition under Topic 606: (i) identify the contract(s) with a customer, (ii) identify the performance obligations in the contract, (iii) determine the transaction price, (iv) allocate the transaction price to the performance obligations in the contract, and (v) recognize revenue when (or as) we satisfy a performance obligation. Billings to customers for which services are not rendered are considered deferred revenue. ASC 606 has no material impacts on the Company’s financial positions. The Company’s revenue is recognized when it satisfies a single performance obligation by transferring control of its products or providing services to a customer. The Company’s general payment terms are short-term in duration. The Company does not have significant financing components or payment terms.
| a. | Early childhood education services: HF Int’l Education generates revenue from childhood education classes provided to its customers. The educational services consist of parent-child and bilingual childcare classes. Each contract of educational classes is accounted for as a single performance obligation which is satisfied proportionately over the service period. Tuition fee is generally collected in advance and is initially recorded as deferred revenue and transferred to contract liabilities after trial period. Refunds are provided to parents if they decide within the trial period that they no longer want to take the class. After the trial period, if a parent withdraws from a class, usually only that unearned portion of the fee is available to be returned. Nil of revenue has been generated during the three and nine months ended April 30, 2023. For the three and nine months ended April 30, 2022, $151,930 and $476,842, respectively, of revenue were derived from early childhood education classes provided. | |
| b. | Hospitality services: HZLJ generates revenue primarily from the room rentals, sale of food and beverage and other miscellaneous hospitality services. The Company recognizes room rental and services daily as services are provided. Under ASC 606, the pattern and timing of recognition of income from hotel facility is consistent with the prior accounting model. |
Impacted by the Covid-19 pandemic and Chinese regulation on education industry, both early childhood education services and hospitality services have been sold on August 1 2022. Thus, there was no revenue recognized from the two-revenue-stream for the nine-month ended April 30, 2023. See Note 3 Acquisitions and Disposals.
| 9 |
Recent Accounting Pronouncements.
Recently issued accounting pronouncements not yet generated any revenues from operations. Revenues areadopted
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 derived principally from subscriptionscollected 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 our website.
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, PhotoAmigoHartford Great Health Corp. has incurred losses since inception, (April 2, 2008), resulting in an accumulated deficit of $321,101$6,971,862 as of January 31, 2018.April 30, 2023. 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 Hartford 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.
NOTE 3. ACQUISITIONS AND DISPOSALS
In January 2019, HFSH entered agreements to acquire 100 percent equity interest of Shanghai Luo Sheng International Trade Ltd. (“SH Luosheng”). On August 1, 2022, HFSH decided to withdraw from the agreement entered in January 2019 to acquire 100 percent equity interest of Shanghai Luo Sheng International Trade Ltd. (“SH Luosheng”). There was no penalty levied or to be levied due to delayed execution or inexecution.
Impacted by the government regulation newly implemented in education industry and the restrictions posted by the Chinese government to control the pandemic in China since 2021, the Company’s business hasn’t been developed as planned and occurred significant loss from the early child education practice. To avoid further operation losses, subsequently on August 1, 2022, HFSH entered a contract with a related party, Shanghai Oversea Chinese Culture Media Ltd. (“SH Oversea”), to sell 90 percent ownership of HF Int’l Education and its subsidiaries for $900 (RMB 5,850). On August 1, 2022, HFUS entered a contract with SH Oversea and another individual, to sell 100 percent ownership of HZHF and its subsidiaries for $1,000 (RMB 6,500).
SCHEDULE OF NET ASSETS (LIABILITIES) DISPOSED OF SUBSIDIARY
| Net assets (liabilities) disposed of: | ||||
| Cash and cash equivalents | $ | 4,938 | ||
| Prepaid and Other current receivables | 45,532 | |||
| Related party receivable | 428,519 | |||
| Inventory | 305,124 | |||
| Property and equipment - Net | 582,707 | |||
| ROU assets-Operating lease | 2,836,698 | |||
| Other assets | 296,218 | |||
| Related party loan and payables | (1,321,549 | ) | ||
| Contract liabilities | (547,906 | ) | ||
| Lease liabilities, current and noncurrent | (3,715,688 | ) | ||
| Other current payable | (401,782 | ) | ||
| Other liabilities | (357,796 | ) | ||
| Noncontrolling interest | 1,307,586 | |||
| Net assets (liabilities) of the subsidiaries, excluding noncontrolling interest | (537,399 | ) | ||
| Consideration | 1,831 | |||
| Gain on disposal of the subsidiaries | $ | (539,230 | ) | |
The total assets and liabilities of Education and hospitality segments that were classified as held for sale on the Company’s consolidated balance sheet as of July 31, 2022 as follows:
SCHEDULE OF DISCONTINUED OPERATIONS OF FINANCIAL STATEMENTS
| July 31, 2022 | ||||
| Assets | ||||
| Current Assets | ||||
| Cash and cash equivalents | $ | 4,938 | ||
| Prepaid and Other current receivables | 45,532 | |||
| Related party receivable | 428,519 | |||
| Inventory | 305,124 | |||
| Property and equipment, net | 582,707 | |||
| ROU assets-operating lease | 2,836,698 | |||
| Other assets | 296,218 | |||
| Total Assets held for sale | $ | 4,499,736 | ||
| Liabilities | ||||
| Current Liabilities | ||||
| Related party loan and payables | $ | 1,321,549 | ||
| Contract liabilities | 547,906 | |||
| Lease liabilities, current and noncurrent | 3,715,688 | |||
| Other current payable | 401,782 | |||
| Other liabilities | 357,796 | |||
| Total Liabilities held for sale | $ | 6,344,721 | ||
| 11 |
The unaudited Pro Forma Condensed Consolidated Financial Statements for the sixthree and nine months ended JanuaryApril 30, 2022 have been derived from the historical unaudited Condensed Consolidated Financial Statements included in the Quarterly Report on Form 10-Q for the quarterly period ended April 30, 2022 filed with the Securities and Exchange Commission (“SEC”) on July 7, 2022. The unaudited Pro Forma Condensed Consolidated Financial Statements for the years ended July 31, 2018,2022 and 2021 have been derived from the historical audited Consolidated Financial Statements included in the Annual Report on Form 10-K for the year ended July 31, 2022 filed with the SEC on November 14, 2022. The unaudited Pro Forma Condensed Consolidated Statement of Operations for the three and nine months ended April 30, 2022 and the years ended July 31, 2022 and 2021 give effect to the dispositions as if they had occurred on August 1, 2020, the beginning of the earliest period presented. The unaudited Pro Forma Condensed Consolidated Balance Sheet as of July 31, 2022 gives effect to the dispositions as if they had occurred on July 31, 2022.
The unaudited Pro Forma Condensed Consolidated Financial Statements were prepared for illustrative and informational purposes only and are not intended to represent what our results of operations or financial position would have been had the disposition occurred on the dates indicated. The unaudited Pro Forma Condensed Consolidated Financial Statements also should not be considered indicative of our future results of operations or financial position. The actual financial position and results of operations may differ significantly from the pro forma amounts reflected herein due to a variety of factors. The unaudited Pro Forma Condensed Consolidated Financial Information does not reflect the realization of any expected cost savings, synergies, or dis-synergies as a result of the dispositions.
The unaudited Pro Forma Condensed Consolidated Financial Statements and accompanying notes should be read in connection with the historical unaudited Condensed Consolidated Financial Statements and accompanying notes for the three and nine months ended April 30, 2022, which are included in the Quarterly Report on Form 10-Q for the quarterly period ended April 30, 2022, as well as the historical audited Consolidated Financial Statements and accompanying notes as of and for the years ended July 31, 2022 and 2021, which are included in the Annual Report on Form 10-K for the year ended July 31, 2022.
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
SCHEDULE OF PRO FORMA INFORMATION
| Historical | Less: Discontinued Operations (a) | Pro Forma Continuing Operations | Historical | Less: Discontinued Operations (a) | Pro Forma Continuing Operations | |||||||||||||||||||
| Three months ended April 30, 2022 | Nine months ended April 30, 2022 | |||||||||||||||||||||||
| Historical | Less: Discontinued Operations (a) | Pro Forma Continuing Operations | Historical | Less: Discontinued Operations (a) | Pro Forma Continuing Operations | |||||||||||||||||||
| Tuition revenue | $ | 151,930 | $ | 151,930 | $ | - | $ | 476,842 | $ | 476,842 | $ | - | ||||||||||||
| Service revenue | 5,840 | 5,840 | - | 37,691 | 37,691 | - | ||||||||||||||||||
| Total revenue | 157,770 | 157,770 | - | 514,533 | 514,533 | - | ||||||||||||||||||
| Operating cost and expenses | ||||||||||||||||||||||||
| Cost of tuition revenue | 264,084 | 264,084 | - | 866,178 | 866,178 | - | ||||||||||||||||||
| Cost of service revenue | 3,884 | 3,884 | - | 18,390 | 18,390 | - | ||||||||||||||||||
| Cost of revenue | 267,968 | 267,968 | - | 884,568 | 884,568 | - | ||||||||||||||||||
| Depreciation and amortization | 27,958 | 27,958 | - | 90,968 | 90,968 | - | ||||||||||||||||||
| Selling, general and administrative | 340,133 | 301,478 | 38,655 | 1,313,841 | 1,170,519 | 143,322 | ||||||||||||||||||
| Goodwill impairment | - | |||||||||||||||||||||||
| Total operating cost and expenses | 636,059 | 597,404 | 38,655 | 2,289,377 | 2,146,055 | 143,322 | ||||||||||||||||||
| Operating Loss | (478,289 | ) | (439,634 | ) | (38,655 | ) | (1,774,844 | ) | (1,631,522 | ) | (143,322 | ) | ||||||||||||
| Other Income (Expense) | ||||||||||||||||||||||||
| Interest (expense), net | (16,768 | ) | (13,689 | ) | (3,079 | ) | (49,629 | ) | (41,342 | ) | (8,287 | ) | ||||||||||||
| Other income, net | 52,501 | 52,501 | - | 150,560 | 150,420 | 140 | ||||||||||||||||||
| Gain (loss) on disposal of subsidiary | - | |||||||||||||||||||||||
| Other income, net | 35,733 | 38,812 | (3,079 | ) | 100,931 | 109,078 | (8,147 | ) | ||||||||||||||||
| Income (loss) before income taxes | (442,556 | ) | (400,822 | ) | (41,734 | ) | (1,673,913 | ) | (1,522,444 | ) | (151,469 | ) | ||||||||||||
| Income Tax Expense | 800 | - | 800 | 800 | - | 800 | ||||||||||||||||||
| Net income (loss) | (443,356 | ) | (400,822 | ) | (42,534 | ) | (1,674,713 | ) | (1,522,444 | ) | (152,269 | ) | ||||||||||||
| Less: net loss attributable to noncontrolling Interest | (48,090 | ) | (48,090 | ) | - | (177,817 | ) | (177,817 | ) | - | ||||||||||||||
| Net income (loss) attributable to Hartford Great Health Corp | $ | (395,266 | ) | $ | (352,732 | ) | $ | (42,534 | ) | $ | (1,496,896 | ) | $ | (1,344,627 | ) | $ | (152,269 | ) | ||||||
| Net loss per common share: | ||||||||||||||||||||||||
| Basic and Diluted | $ | (0.00 | ) | $ | (0.00 | ) | $ | (0.01 | ) | $ | (0.00 | ) | ||||||||||||
| Weighted average shares outstanding: | ||||||||||||||||||||||||
| Basic and diluted | 100,108,000 | 100,108,000 | 100,108,000 | 100,108,000 | ||||||||||||||||||||
| 12 |
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
| 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 (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 | ) | ||||||||||||||
| Net Income (Loss) | (1,772,582 | ) | (1,582,152 | ) | (190,430 | ) | (2,842,339 | ) | (2,760,611 | ) | (53,056 | ) | (134,784) | |||||||||||||||
| Less: net loss attributable to noncontrolling Interest | (193,481 | ) | (193,481 | ) | - | (589,005 | ) | (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 income (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 | $ | (0.02 | ) | $ | (0.00 | ) | $ | (0.02 | ) | $ | 0.00 | |||||||||||||||||
| Weighted average shares outstanding: | ||||||||||||||||||||||||||||
| Basic and diluted | 100,108,000 | 100,108,000 | 99,790,192 | 99,790,192 | ||||||||||||||||||||||||
| 13 |
UNAUDITED 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 | |||||||||
| 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 | ||||||||||||
| $ | 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 | ||||||
| 14 |
NOTE 4. RELATED PARTY TRANSACTIONS
Related Party Receivables
As of July 31, 2022, $428,519 related party receivables were allocated to current assets held for sales. See Note 3 Acquisitions and Disposals.
$60,774 and $14,233 related party receivable as of April 30, 2023 and July 31, 2022, respectively, represent the operating advances made to the affiliates which are managed by the same management team. These advances do not bear interest and are considered due on demand.
Related Party Payables and loans
As of April 30, 2023, and July 31, 2022, amounts of $605,785 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 $3,459,443 and $3,531,064 as of April 30, 2023 and July 31, 2022, respectively. The payable is funding support from SH Oversea for operation, bears no interest and due on demand.
As of April 30, 2023 and July 31, 2022, amount of $375,000 and $290,000, respectively, borrowed in form of a short-term loan at 5% per annum from a related party, Hartford Hotel Investment Inc., an entity managed by the same management team. $4,775 and $12,953 of interest expenses were recorded during the three and nine months ended April 30, 2023, respectively. $3,078 and $8,287 of interest expense, respectively, were recorded during the three and nine months ended April 30, 2022. The unpaid principal and interest will be due on demand.
The remaining related party payable of $74,538 and $39,583 as of April 30, 2023 and July 31, 2022, respectively, represents the unpaid portion of operating advances made to the Company borrowed $12,663 from four shareholders to fund the Company's ongoing activities. The shareholders have not received any equity for these loans and these loansby affiliates which are repayablemanaged by the Company. Simplesame management team. These advances do not bear interest accruesand are considered due on these notesdemand.
As of July 31, 2022, $1,321,549 related party payables were allocated to current liabilities held for sales. See Note 3 Acquisitions and Disposals.
Other Related Party Transactions
Office space at 2% annually. Principle and interest are due upon sale or merger of the company or upon demand. The Company has accrued an interest expense of $257 for the six months ended January 31, 2018 related to these notes. This compares to the $9,980 borrowed from four shareholders: $2,500 from three and $2,480 from a fourth shareholder during the first six months of 2017. During the same timeframe in 2017 the Company accrued an interest expense of $59 for the six months.
| Period Ending | Estimated NOL carry-forward | NOL expires | Estimated tax benefit from NOL | Valuation allowance | Change in valuation allowance | Net tax asset | ||||||||||||||||||
| July 31, 2008 | $ | 86,500 | 2028 | $ | 12,900 | $ | (12,900 | ) | $ | (12,900 | ) | $ | - | |||||||||||
| July 31, 2009 | $ | 122,700 | 2029 | $ | 18,400 | $ | (18,400 | ) | $ | (5,500 | ) | $ | - | |||||||||||
| July 31, 2010 | $ | 147,700 | 2030 | $ | 22,100 | $ | (22,100 | ) | $ | (3,700 | ) | $ | - | |||||||||||
| July 31, 2011 | $ | 178,100 | 2031 | $ | 26,700 | $ | (26,700 | ) | $ | (4,600 | ) | $ | - | |||||||||||
| July 31, 2012 | $ | 200,100 | 2032 | $ | 30,000 | $ | (30,000 | ) | $ | (3,300 | ) | $ | - | |||||||||||
| July 31, 2013 | $ | 217,100 | 2033 | $ | 32,500 | $ | (32,500 | ) | $ | (2,500 | ) | $ | - | |||||||||||
| July 31, 2014 | $ | 238,100 | 2034 | $ | 35,700 | $ | (35,700 | ) | $ | (3,200 | ) | $ | - | |||||||||||
| July 31, 2015 | $ | 259,100 | 2035 | $ | 38,800 | $ | ( 38,800 | ) | $ | ( 3,100 | ) | $ | - | |||||||||||
| July 31, 2016 | $ | 287,100 | 2036 | $ | 43,000 | $ | (43,000 | ) | $ | (4,200 | ) | $ | - | |||||||||||
| July 31, 2017 | $ | 307,100 | 2037 | $ | 46,000 | $ | (46,000 | ) | $ | (3,000 | ) | $ | - | |||||||||||
| January 31, 2018 | $ | 321,100 | 2038 | $ | 48,200 | $ | (48,200 | ) | $ | (2,200 | ) | $ | - | |||||||||||
| 2018 | 2017 | ||
| Income tax benefit at statutory rate | (21%) | (21%) | |
| Deferred income tax valuation allowance | 21% | 21% | |
| Reported tax rate | 0% | 0% |
NOTE 5. COMMITMENTS AND CONTINGENCIES
There are limitations on the utilization of net operating loss carryforwards, 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 valuation allowance has been established for the entire deferred tax asset.
NOTE 6. SEGMENT INFORMATION
Accounting Standards Codification (“ASC”) 280, “Segment Reporting,” requires public companies to report financial and descriptive information about their reportable operating segments. We identify our operating segments based on how our chief operating decision maker internally evaluates separate financial information, business activities and management responsibility.
The Company is authorizedused to issue 5,000,000 sharesoperate 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 preferred stock with a par value of $0.001 per share. No shares of preferred stockoperating subsidiaries on August 1, 2022, we currently have been issued or outstanding since Inception (April 2, 2008).
NOTE 7. SUBSEQUENT EVENTS
In accordance with ASC 855, "Subsequent Events"“Subsequent Events”, the Company has evaluated subsequent events through the date of issuance of these unaudited financial statements and has determined that it did not have any material recognizableno subsequent events were noted.
Forward-Looking Statements
This Form 10-Q contains or incorporates by reference “forward-looking statements,” as that term is used in federal securities laws, about our financial condition, results of operations and business. These statements include, among others:
| - | statements concerning the benefits that we expect will result from our business activities and results of business development that we contemplate or have completed, such as increased revenues; and statements of our expectations, beliefs, future plans and strategies, anticipated developments and other matters that are not historical facts. These statements may be made expressly in this document or may be incorporated by reference to other documents that we will file with the SEC. You can find many of these statements by looking for words such as “believes,” “expects,” “anticipates,” “estimates” or similar expressions used in this report or incorporated by reference in this report. |
These forward-looking statements are subject to numerous assumptions, risks and uncertainties that may cause our actual results to be materially different from any future results expressed or implied in those statements. Because the statements are subject to risks and uncertainties, actual results may differ materially from those expressed or implied. We caution you not to put undue reliance on these statements, which speak only as of the date of this report. Further, the information contained in this document or incorporated herein by reference is a statement of our present intention and is based on present facts and assumptions, and may change at any time and without notice, based on changes in such facts or assumptions.
| 16 |
Item 2. Management'sManagement’s Discussion and Analysis or Plan of Operation Overview
This discussion updates our business plan for the Six month periodthree- and nine-month periods ending January 31, 2018.April 30, 2023. It also analyzes our financial condition at January 31, 2018,April 30, 2023 and compares it to our financial condition at July 31, 2017.2022. This discussion and analysis should be read in conjunction with our audited financial statements for the year ended July 31, 2017,2022, including footnotes, contained in our Annual Report on Form 10-K, and with the unaudited financial statements for the interim period ended January 31, 2018,April 30, 2023, including footnotes, which are included in this quarterly report.
Overview
Hartford Great Health Corp. was originally incorporated in the State of Nevada on April 2, 2008, ("Inception"). Since Inception,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 which is to develop photographic sharing and networking through its website PhotoAmigo.com
Ability to continue as a "going“going concern
The independent registered public accounting firm'sfirms’ reports on our financial statements as of July 31, 2017 and July 31, 20162022, 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 April 30, 2023, the domain names PhotoAmigo.net, fotoamigo.com and fotoamigo.net. These domain names all redirect incoming trafficcompany 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 our main website, PhotoAmigo.com.
| 17 |
On December 28, 2018, the Company acquired Hangzhou Hartford Comprehensive Health Management, Ltd (“HZHF”). On March 22, 2019, the Company acquired 60 percent of Hangzhou Longjing Qiao Fu Vacation Hotel Co., Ltd. (“HZLJ”). On March 20, 2019, the Company acquired Shanghai Hartford Comprehensive Health Management, Ltd. (“HFSH”) with 90 percent of Shanghai Qiao Garden International Travel Agency (“Qiao Garden Int’l Travel”), which was disposed on December 31, 2020, and formed a joint venture entity, Hartford International Education Technology Co., Ltd (“HF Int’l Education”).
The subsidiary of HFUS in Shanghai (HFSH) advances operating funds from two related party entities, SH Qiao Hong and SH Oversea Chinese Culture Media Ltd. The main purpose of the funding is to invest in Hartford International Education Technology (Shanghai) Co., Ltd. (HF Int’l Education). Upon signing of supplemental agreement, HFUS currently holds 75.5% ownership of HF Int’l Education and maintains control over HF Int’l Education. On July 24, 2019, HF Int’l Education established a 100% owned subsidiary, Pudong Haojin Childhood Education Ltd. (“PDHJ”). On October 28, 2019, PDHJ had its childhood education center opened. On March 23, 2020, HF Int’l Education established Shanghai Hongkou HaiDeFuDe Childcare Co., Ltd.(“HDFD”) and was approved the business license to conduct childcare operations in Shanghai, China. On July 20, 2020, HF Int’l Education entered an agreement with two individuals to acquire the whole ownership of Shanghai Gelinke Childcare Education Center (“Gelinke”). During the board meeting, SH Jingyu and another noncontrolling shareholders also sold a total of 14.5% equity at zero value to HFSH. As a result, HFSH holds 90% of HF Int’l Education and a total of 10% equity is held by two individual noncontrolling shareholders.
HF Int’l Education has developed an enhanced model of childcare franchise management program and registered a new brand name, “HaiDeFuDe”. HF Int’l Education has recruited a team of knowledgeable childcare teachers to develop series of independent textbooks designed to targeted age of young children and register for the copyrights for these textbooks in September of 2020. Since then, HF Int’l Education has begun marketing and promoting the enhanced model of franchise operation and management packaged program, under “HaiDeFuDe” brand, to an initial of 50 franchisees throughout different regions of China. To achieve that, HF Int’l Education has incorporated existing market resources throughout other major cities and provinces in China. The promotion of HF Int’l Education franchise operation and management model was expected to attract other childcare education centers to join the “HaiDeFuDe” brand, and HF Int’l Education expected to generate revenue from franchise and management fees.
Due to market uncertainties during the pandemic, the board of HFSH adopted a new management approach to ease cash flow and reduce operation loss. In March 2021, HF Int’l Education entered agreements with Hartford Health Management (Shanghai), Co. Ltd. (“HFHM”). HFHM purchased seven education & intellectual property copy rights and ten “HaiDeFuDe” registered trademarks from HF Int’l Education for a total amount of RMB1.2M and RMB1.0M, respectively. In June 2021, HF Int’l Education and its three subsidiaries entered license agreements with HFHM for the rights to use the intellectual Properties (the “IPs”) HFHM owns. The IPs cover in the license agreements are four sets of curriculum structure designed and fifteen trademarks including “HaiDeFuDe” registered trademarks purchased from HF Int’l Education. As a return, on a monthly basis, HF Int’l Education and its subsidiaries pays 20% of its tuition revenue generated to HFHM as license usage fee.
Impacted by Covid-19 pandemic and the government regulation implemented in education industry and the restrictions posted by the Chinese government to control the pandemic in China since 2021, to avoid further operation losses, on August 1, 2022, HFSH entered a contract with a related party, Shanghai Oversea Chinese Culture Media Ltd. (“SH Oversea”), to sell 90 percent ownership of HF Int’l Education and its subsidiaries for $900 (RMB 5,850). On August 1, 2022, HFUS entered a contract with SH Oversea and another individual, to sell 100 percent ownership of HZHF and its subsidiaries for $1,000 (RMB 6,500).
The company’s sole subsidiary, HFSH is currently working with herbal manufacturers to develop new herbal health supplement products for wholesale distribution in China. The expected marketing and product launch date is in July of this year .
| 18 |
Results of Operations – Three months ended April 30, 2023 Compared to Three months ended April 30, 2022.
Operating Expenses: Operating expenses decreased to $21,417 for the three months ended April 30, 2023, compared to $38,655 during the comparable period of 2022. The decrease of operating expenses was due to the reduction of payroll and professional expenses occurred in US as a result of the downsize of business operation.
Other Income (Expense): Other expense, net increased to $4,776 for the three months ended April 30, 2023, compared to other income, net of $3,079 for the corresponding period of 2022. Other expense for the three months ended April 30, 2023 and 2022 was mainly resulted from interest expenses.
Net Loss from continuing operations: Net loss from continuing operations decreased to $26,193 for the three months ended April 30, 2023, compared to net loss from continuing operations of $42,534 for the corresponding period of 2022 as result of above.
Net Loss from discontinued operations, net of tax: We realized $400,822 net operation loss, including $157,770 revenue, $267,968 cost of revenue and $329,436 operating expenses and others in the three months ended April 30, 2022 from two industry segments, the hospitality housing in HZLJ and childhood education care services in HF Int’l Education. These two business operations have been disposed on August 1, 2022. see Note 3 Acquisitions and Disposals.
Net Loss Attributable to Noncontrolling Interest: For the three months ended April 30, 2023, we recorded a net loss attributable to noncontrolling interest of $- compared to $48,090 for the corresponding period of 2022. The loss was allocated based on the websiteownership percentage of noncontrolling interest, which has been disposed on August 1, 2022. see Note 3 Acquisitions and attract additional subscribers. PhotoAmigo believes that its brand, product offeringDisposals.
Net Income (Loss) Attributable to Hartford Great Health Corp: We recorded a net loss of $26,193 or $0.00 per share for the three months ended April 30, 2023, compared to a net loss of $395,266 or $0.00 per share for the three months ended April 30, 2022, due to the factors discussed above.
Results of Operations – Nine months Ended April 30, 2023 Compared to Nine months Ended April 30, 2022
Operating Expenses: Operating expenses decreased to $97,427 for the nine months ended April 30, 2023, compared to $143,322 during the comparable period of 2022. The decrease of operating expenses was due to the reduction of payroll and future enhancements will continueprofessional expenses occurred in US as a result of the downsize of business operation.
Other Income (Expense): Other income, net increased to attract users$526,185 for the nine months ended April 30, 2023, compared to $(8,147) net loss for the corresponding period of 2022. Other income for the nine months ended April 30, 2023 was mainly resulted from the gain on disposal of subsidiaries offset by interest expenses. Other income for the nine months ended April 30, 2022 was mainly resulted from sublease income offset by interest expenses.
Net income (loss) from continuing operations: Net income from continuing operations increased to $428,758 for the nine months ended April 30, 2023, compared to net loss from continuing operations of $152,269 for the corresponding period of 2022 as result of above.
Net Loss from discontinued operations, net of tax: We realized $1,522,444 net operation loss, including $514,533 revenue, $884,568 cost of revenue and will make it$1,261,487 operating expenses and others in the nine months ended April 30, 2022 from two industry segments, the hospitality housing in HZLJ and childhood education care services in HF Int’l Education. These two business operations have been disposed on August 1, 2022. see Note 3 Acquisitions and Disposals.
Net Loss Attributable to Noncontrolling Interest: For the nine months ended April 30, 2023, we recorded a premier destinationnet loss attributable to noncontrolling interest of $- compared to $177,817 for photo sharing. While there are established photo sharing sitesthe corresponding period of 2022. The loss was allocated based on the Internet, we believe thatownership percentage of noncontrolling interest, which has been disposed on August 1, 2022. see Note 3 Acquisitions and Disposals.
Net Income (Loss) Attributable to Hartford Great Health Corp: We recorded a net income of $428,758 or $0.00 per share for the continued growthnine months ended April 30, 2023, compared to a net loss of sharing photos and photo blogging will create an opportunity$1,496,896 or $(0.01) per share for additional sites. Our strategy isthe nine months ended April 30, 2022, due to engage users by offering free photo sharing and social networking services. We believe that by offering a full suite of services for free, we can eventually get users to upgrade their membership for more photo sharing storage space.
Liquidity and Capital Resources
As of January 31, 2018,April 30, 2023, we had a working capital deficit of $(35,030),$4,601,424 comprised of $1,117 in cashcurrent assets of $76,632 and $36,147current liabilities of current liabilities.This$4,678,056. This represents a decrease of $1,839,231 in the working capital of $13,350deficit from the working capital deficit balance of $(21,680) reported as of July 31, 2017 which comprised cash2022 amount of $1,928$6,440,655 . The decrease was primarily because the disposal of operations in hospitality housing and current liabilities, comprising current liabilitieschildhood education care services on August 1, 2022. see Note 3 Acquisitions and Disposals.
We believe that our funding requirements for the next twelve months will be in excess of $23,608.
As of capital resources will require usApril 30, 2023, the company has issued a total of 100,108,000 shares of common stock. On December 11, 2018, 96,090,000 shares of common stock were issued at the price of $0.02 per share to obtainraise an additional funding to achieve our photo sharing website development goals. In$1,921,800 in capital. On November 24, 2020, the past we have relied on issuancesCompany issued additional 1,000,000 shares of common stock to fund our operations.
We maywill 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.
| 19 |
Cash Flows – Six Months Ended January 31, 2018Nine months ended April 30, 2023 Compared to the Six Months Ended January 31, 2017
Operating Activities
During the sixnine months ended January 31, 2018 weApril 30, 2023, $83,083 used $13,474 in operating activities as compared to the $8,841$1,041,031 used in the operations during the sixnine months ended January 31, 2017.April 30, 2022. During the sixnine months ended January 31, 2018,April 30, 2023, we recorded lossesnet income of $13,820, incurred non cash depreciation$428,758, adjusted by subsidiary disposal gain of $470$539,230, related party payables net with receivables increased by $33,211 and accountsoffset by other current payable decreased by $381. Additionally$6,654.
During the increase in interest payable of $257 is from accrued rather than paid interest and is a non-cash using item. By comparison, during the sixnine months ended January 31, 2017,April 30, 2022, we recorded lossesloss from continuing operation of $9,412,$152,269, incurred non-cash depreciation of $470, and accountsother current payable increased by $42 while accrued interest$6,065, related party payables net with receivables increased by $59.
Investing activities
Nil of investing activities occurred during the sixnine months ended January 31, 2018 and January 31, 2017 we did not purchase any capital assets, we neitherApril 30, 2023.
Cash used nor generated funds fromin investing activities.
Financing activities
Cash provided by financing activities was $85,000 for the nine months ended April 30, 2023 as compared to finance$1,177,463 cash provided by financing activities for the Company's ongoing activities. nine months ended April 30, 2022. The shareholders did not receive any equitycash flows provided by financing activities for these loansthe nine months ended April 30, 2023 was from the proceeds of notes payable. The notes payable was borrowed from one related party with 5% annual interest rate. See Note 4 Related Party Transactions.
The cash flows provided by financing activities for the nine months ended April 30, 2022 was primarily attributable to $1,018,395 funding support from related parties, $120,000 proceeds of notes payable. The notes payable was borrowed from one related party with 5% annual interest rate.
Future Capital Expenditures
As of April 30, 2023, we have no future capital expenditures plan.
| 20 |
Off-Balance Sheet Arrangements
As of and they are repayable by, the company. Accordingly, these fundssubsequent to April 30, 2023, we have been accounted for as loans. For the period ending January 31, 2017no off-balance sheet arrangements.
Contractual Commitments
As of April 30, 2023, we received $9,980 from loans from 4 shareholders.
Critical Accounting Policies
Our significant accounting policies are disclosed in Note 1 of the footnotes to our unaudited financial statements above. There have been no other changes in our critical accounting policies since our most recent audit dated July 31, 2017.
Item 3. Quantitative and Qualitative Disclosures about Market Risk
As a "smaller“smaller reporting company"company” as defined by Item 10 of Regulation S-K, we are not required to provide information required by this Item.
Item 4. Controls and Procedures
Evaluation of Disclosure Controls and Procedures
An evaluation was performed under the supervision of our management, including our Chief Executive Officer and Chief Financial Officer (principal financial officer), of the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) of the Exchange Act) as of the end of the period covered by this AnnualQuarterly Report. Based on that evaluation, our management, including our Chief Executive Officer and Chief Financial Officer, concluded that, as of January 31, 2018,April 30, 2023, our disclosure controls and procedures were not effective to ensure that information we are required to disclose in reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC'sSEC’s rules and forms due to material weaknesses in our internal controls described below.
Management’s Report on Internal Control over Financial Reporting
Management’s assessment identified several material weaknesses in our internal controls over financial reporting that occurred during our last quarter that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting. These material weaknesses include the following:
| ● | Lack of proper authorization and approval procedures on significant business transactions. | |
| ● | Lack of competence accounting personnel at entity level and proper segregation of duties implemented. |
Changes in Internal Control
During the nine months period ended April 30, 2023, there has been no change in internal control within the Company.
| 21 |
PART II – OTHER INFORMATION
Item 1. Legal Proceedings.
We were not subject to any other legal proceedings during the six month periodsnine months ended January 31, 2018 or 2017April 30, 2023, and are not currently subject to any legal proceedings, and to the best of our knowledge, no such proceeding is threatened, the results of which would have a material impact on our results of operation or financial condition. Nor, to the best of our knowledge, are any of our officers or directors involved in any legal proceedings in which we are pending or threatened.
Item 1A. Risk Factors.
As a "smaller“smaller reporting company"company” as defined by Item 10 of Regulation S-K, we are not required to provide information required by this Item.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.
None
Item 3. Defaults Upon Senior Securities.
None
Item 4. Mine Safety Disclosures
Not applicable to our Company.
Item 5. Other Information.
Not applicable to our Company.
Item 6. Exhibits.
The following exhibits are filed with or incorporated by referenced in this report:
101 Interactive Data Files
101.INS Inline XBRL Instance Document
101.SCH Inline XBRL Taxonomy Extension Schema Document
101.CAL Inline XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF Inline XBRL Taxonomy Extension Definition Linkbase Document
101.LAB Inline XBRL Taxonomy Extension Label Linkbase Document
101.PRE Inline XBRL Taxonomy Extension Presentation Linkbase Document
104 Cover Page Interactive Data File (embedded within the Inline XBRL document)
| 22 |
SIGNATURES
In accordance with Section 13 or 15(d) of the Exchange Act of 1934, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
| HARTFORD GREAT HEALTH CORP. | ||||
| Date: June 12, 2023 | By: | /s/ ROSE HONG WANG | ||
| Rose Hong Wang | ||||
| 23 | ||||