Hartford Great Health Corp. - Quarter Report: 2014 October (Form 10-Q)

(Mark One)

FORM 10-Q

Index

Part I - FINANCIAL INFORMATION

 

 

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		31-Oct-14				July 31, 2014
		(unaudited)
ASSETS
Current assets:
Cash and cash equivalents		$	909			$	2,327
Total current assets			909				2,327
Total assets		$	909			$	2,327
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
Current liabilities:
Accounts payable		$	1,233			$	1,413
Advances from officer			-				227
Total current liabilities			1,233				1,640
Total liabilities			1,233				1,640
Commitments and contingencies
Stockholders' equity:
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 and 3,018,000 shares issued and outstanding, repsectively			3,018				3,018
Additional paid-in capital			235,613				235,613
(Deficit) accumulated  during the development stage			(238,955	)			(237,944	)
Total stockholders' equity (deficit)			(324	)			687
Total liabilities and stockholders' equity (deficit)		$	909			$	2,327

 

 

 

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

 

 

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		Three Months				Three Months				From Inception
		ended				ended				(April 2, 2008) to
		October 31, 2014				October 31, 2013				October 31, 2014
Revenues		$	-			$	-			$	-
Operating Expenses:
Website development			174				170				23,422
Employee compensation			-				-				25,800
Sales and marketing			-				-				3,162
Legal and accounting fees			506				2,499				76,854
Investor relations			306				355				41,501
Other general and administrative			25				75				8,413
Impairment			-				-				59,400
Total operating expenses			1,011				3,099				238,552
Operating (loss)			(1,011	)			(3,099	)			(238,552	)
Other income(expense):
Interest expense			-				(2	)			(631	)
Interest income			-				-				228
Net (loss)		$	(1,011	)		$	(3,101	)		$	(238,955	)
Net (loss) per common share:
Basic and Diluted		$	(0.00	) *		$	(0.00	)*
Weighted average shares outstanding:
Basic and Diluted			3,018,000				3,012,000

 

 

											Additional								Total
			Common Stock								Paid - in				Accumulated				Stockholders'
			Shares				Amount				Capital				(Deficit)				Equity (Deficit)
Balance at Inception, April 2, 2008 - audited				-			$	-			$	-			$	-			$	-
Shares issued in exchange for assets, April 2, 2008				2,100,000				2,100				57,000				-				59,100
Shares issued for cash at
$0.094 per share, April 2, 2008				500,000				500				46,500				-				47,000
Shares issued for cash and services at
$0.094 per share, April 2, 2008				250,000				250				23,250				-				23,500
Shares issued for cash at
$0.0833 per share, April 28, 2008				138,000				138				11,362				-				11,500
Net (loss) for the period				-				-				-				(86,542	)			(86,542	)
Balance, July 31, 2008 - audited				2,988,000				2,988				138,112				(86,542	)			54,558
Net (loss) for the year				-				-				-				(36,247	)			(36,247	)
Balance, July 31, 2009 - audited				2,988,000				2,988				138,112				(122,789	)			18,311
Shares issued for cash at				24,000				24				376				-				400
$0.0166 per share, January 25, 2010												.
Net (loss) for the year				-				-				-				(24,935	)			(24,935	)
.
Balance, July 31, 2010 - audited				3,012,000				3,012				138,488				(147,724	)			(6,224	)
Net (loss) for the year				-				-				-				(30,380	)			(30,380	)
Balance, July 31, 2011 - audited				3,012,000				3,012				138,488				(178,104	)			(36,604	)
Net (loss) for the year				-				-				-				(21,826	)			(21,826	)
Additional paid in capital - related parties				-				-				57,131								57,131
Balance, July 31 , 2012 - audited				3,012,000				3,012				195,619				(199,930	)			(1,299	)
Net (loss) for the year				-				-				-				(17,232	)			(17,232	)
Additional paid in capital - related parties				-				-				20,000								20,000
Balance, July 31 , 2013 - audited				3,012,000				3,012				215,619				(217,162	)			1,469
Adjustment to number of shares issued and outstanding				6,000				6				(6	)			-				-
Net (loss) for the year				-				-				-				(20,782	)			(20,782	)
Additional paid in capital - related parties				-				-				20,000				-				20,000
Balance, July 31, 2014 - audited				3,018,000				3,018				235,613				(237,944	)			687
Net (loss) for the period ended October 31, 2014				-				-				-				(1,011	)			(1,011	)
Balance, October 31 , 2014 - unaudited			$	3,018,000			$	3,018			$	235,613			$	(238,955	)		$	(324	)

 

 

		Three Months				Three Months				From Inception
		ended				ended				(April 2, 2008) to
		October 31, 2014				October 31, 2013				October 31, 2014
Cash flows from operating activities:
Net (loss)		$	(1,011	)		$	(3,101	)		$	(238,955	)
Adjustments to reconcile net (loss) to net cash
used by operating activities:
Impairment			-				-				59,400
Stock issued for services			-				-				20,500
Changes in operating assets and liabilities:
Increase/(decrease) in accounts payable			(180	)			(418	)			1,233
Increase/(decrease) in advances from officer			(227	)			-				-
Net cash (used in) operating activities			(1,418	)			(3,519	)			(157,822	)
Cash flows from investing activities:
Purchase of website assets			-				-				(300	)
Net cash (used in) investing activities			-				-				(300	)
Cash flows from financing activities:
Capital contributions from shareholders			-				7,500				97,131
Proceeds from sale of shares of common stock			-				-				61,900
Net cash provided by financing activities			-				7,500				159,031
Net increase (decrease) in cash and equivalents			(1,418	)			3,981				909
Cash and equivalents at beginning of period			2,327				3,513				-
Cash and equivalents at end of period		$	909			$	7,494			$	909
Supplemental Cash Flow Information
Interest paid		$	-			$	-			$	-
Income taxes paid		$	-			$	-			$	-
Non-cash investing and financing activities:											-
Shares issued in exchange for website domain names,
membership base and software		$	-			$	-			$	59,100

 

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			Estimated tax		Change in
	Estimated NOL	NOL	benefit from	Valuation	valuation	Net tax
Period Ending	carry-forward	expires	NOL	allowance	allowance	asset

July 31, 2008		$	86,500				2028			$	17,300			$	(17,300	)		$	(17,300	)		$	-
July 31, 2009		$	36,200				2029			$	7,200			$	(7,200	)		$	(7,200	)		$	-
July 31, 2010		$	25,000				2030			$	5,000			$	(5,000	)		$	(5,000	)		$	-
July 31, 2011		$	30,400				2031			$	6,100			$	(6,100	)		$	(6,100	)		$	-
July 31, 2012		$	22,000				2032			$	4,400			$	(4,400	)		$	(4,400	)		$	-
July 31, 2013		$	17,000				2033			$	3,400			$	(3,400	)		$	(3,400	)		$	-
July 31, 2014		$	21,000				2034			$	4,000			$	(4,000	)		$	(4,000	)		$	-
October 31, 2014		$	1,000				2035			$	200			$	( 200	)		$	( 200	)		$	-

Income taxes at the statutory rate are reconciled to reported income tax expense (benefit) as follows:

 

	2014		2013
Income tax benefit at statutory rate	(20%)		(20%)
Deferred income tax caluation allowance	20%		20%
Reported tax rate	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 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.

 

 

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5.  Shareholders’ Equity

 

Preferred Stock

The Company is authorized to issue 5,000,000 shares of preferred stock with a par value of $0.001 per share. No shares of preferred stock have been issued or outstanding since Inception (April 1, 2008).

 

Common Stock

The Company is authorized to issue 100,000,000 shares or common stock with a par value of $0.001 per share. No shares of common stock were issued during the three months ended October 31, 2014 or 2013.

There were 3,018,000 shares of common stock issued and outstanding at October 31, 2014.

Additional Paid In Capital

During the three months ended October 31, 2013, three shareholders contributed $7,500 to fund the Company’s ongoing activities. The shareholders have not received any equity for these contributions and the contributions are not repayable. Accordingly these contributions have been credited to additional paid in capital. During the three months ended October 31, 2014, no such capital contributions were made to the Company by shareholders.

In accordance with ASC 855, “Subsequent Events”, the Company has evaluated subsequent events through the date of available issuance of these unaudited financial statements on December 19, 2014. During this period, other than as disclosed above, the Company did not have any material recognizable subsequent events

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

 

This discussion updates our business plan for the three months ending October 31, 2014. It also analyzes our financial condition at October 31, 2014, and compares it to our financial condition at July 31, 2014. This discussion summarizes the results of our operations for the three month period ended October 31, 2014 and compares it to the three month period ended October 31, 2013. This discussion and analysis should be read in conjunction with our unaudited financial statements for the year ended July 31, 2014, including footnotes, contained in our Annual Report on Form 10-K, and with the unaudited financial statements for the interim period ended October 31, 2014, including footnotes, which are included in this quarterly report.

Overview

PhotoAmigo, Inc. (“the Company”, “PhotoAmigo”, “we”, “us” or “our”) was incorporated in the State of Nevada on April 2, 2008 (“Inception”). Since Inception, we have 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 concern”. The independent registered public accounting firm’s reports on our financial statements as of July 31, 2014 and 2013, includes a “going concern” explanatory paragraph that describes substantial doubt about the Company’s ability to continue as a going concern. Management’s plans in regard to the factors prompting the explanatory paragraph are discussed in the financial statements, including footnotes thereto.

Development Stage Company. We are considered to be in the development stage as defined in the accounting standards. We have devoted substantially all of our efforts to business planning and development. Additionally, we have allocated a substantial portion of our time and investment to bringing our product to the market, and to raising capital. We have not yet generated any revenue from operations.

Plan of Operation

We provide social networking and photo sharing from our website PhotoAmigo.com. We also maintain the domain names PhotoAmigo.net, fotoamigo.com and fotoamigo.net. These domain names all redirect incoming traffic to our main website, PhotoAmigo.com.

We believe that we can generate significant revenue from the services provided by our website. We need to continue development of the features on the website and attract additional subscribers. PhotoAmigo believes that its brand, product offering and future enhancements will continue to attract users and will make it a premier destination for photo sharing. While there are established photo sharing sites on the Internet, we believe that the continued growth of sharing photos and photo blogging will create an opportunity for additional sites. Our strategy is 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.

As shown in the following table, we have slowly increased the total number of members using our free services.

July 31, 2011	July 31, 2012	July 31, 2013	July 31, 2014	October 31, 2014
4,553	4,583	4,606	4,615	4,674

 

 

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To become a viable enterprise, we must further increase the number of members visiting out site and convert members from free membership to paid membership. We have not had any members using our paid services since inception (April 2, 2008).

We are unable, at this time, to predict when, if ever, our objectives will be achieved.

Liquidity and Capital Resources

As of October 31, 2014, we had a working capital deficit of $(324), comprised of cash of $909 and current liabilities, comprising accounts payable, of $1,233. This represents a decrease in the working capital of $1,011 from the working capital balance of $ 687 reported as of July 31, 2014 which comprised cash of $2,327 and current liabilities, comprising accounts payable and advanced from officer, of $1,640.

Our lack of capital resources will require us to obtain additional funding to achieve our photo sharing website development goals. In the past we have relied on issuances of common stock to fund our operations.

We may 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.

 

We currently have no written or firm agreement regarding future funding requirements, and we may curtail our efforts or cease activities entirely.

 

Future Capital Expenditures

As of October 31, 2014, we have no plans or commitments to acquire capital assets.

Results of Operations – Three Months Ended October 31, 2014 Compared to the Three Months Ended October 31, 2012

Revenue

We recognized no revenue in the three months ended October 31, 2014 or 2012 as we have not commenced operations as yet.

Operating Expenses

Operating expenses decreased to $1,011 for the three months ended October 31, 2014, compared to $3,101 during the comparable period of 2013. The decrease was substantially due to the decrease in professional fees to $506 during 2014 compared to $2,499 in 2013. We did not incur legal fees associated with filing a registration statement this quarter, as we did during the three months ended October 31, 2013. Consistent with our current need to conserve capital resources, we have reduced our website development expenses, our marketing expenses, and certain general and administrative expenses. Substantially all of our operating expenses are incurred in connection with activities to meet current reporting requirements for a public company and there was no material change in the nature or extent of those activities.

Net Loss

For the three months ended October 31, 2014, we recorded a net loss of $1,011 compared to a net loss for the corresponding period of 2013 of

$3,101 due to the factors discussed above.

 

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Cash Flows – Three Months Ended October 31, 2014 Compared to the Three Months Ended October 31, 2013

 

Operating Activities

 

During the three months ended October 31, 2014 we used $1,418 in operating activities compared to $3,519 in the three months ended October 31, 2013. The decrease in funds used in operating activities between the two periods is broadly in line with the reduction in losses recognized between the two periods.

 

Investing activities

 

We neither used, nor generated, funds from investing activities during the three months ended October 31, 2014 or 2013.

 

Financing activities

 

During the three months ended October 31, 2013, three shareholders contributed $7,500 to fund the Company’s ongoing activities. The shareholders did not receive any equity for these contributions and the contributions are not repayable. Accordingly, these contributions have been accounted for as contributions in capital. We received no such capital contributions from shareholders during the three months ended October 31, 2014.

 

Critical Accounting Policies

 

Our critical accounting policies are disclosed in Note 1 of the unaudited footnotes to our financial statements above. There have been no changes in our critical accounting policies since July 31, 2014.

 

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

 

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statements of our expectations, beliefs, future plans and strategies, anticipated developments and other matters that are not historical facts. These statements may be made expressly in this document or may be incorporated by reference to other documents that we will file with the SEC. You can find many of these statements by looking for words such as “believes,” “expects,” “anticipates,” “estimates” or similar expressions used in this report or incorporated by reference in this report.

 

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

 

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Item 3.  Quantitative and Qualitative Disclosures about Market Risk

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

Item 4. Controls and Procedures

Evaluation of Disclosure Controls and Procedures

An evaluation was performed under the supervision of our management, including our Chief Executive Officer and Chief Financial Officer (principal financial officer), of the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15

(e) of the Exchange Act) as of the end of the period covered by this Annual Report. Based on that evaluation, our management, including our Chief Executive Officer and Chief Financial Officer, concluded that, as of October 31, 2014, our disclosure controls and procedures were not effective to ensure that information we are required to disclose in reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms due to material weaknesses in our internal controls described below.

Management’s Report on Internal Control over Financial Reporting

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 October 31, 2014. Based on this assessment, management believes that as of October 31, 2014, 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:

Limited capability to interpret and apply accounting principles generally accepted in the United States; Lack of formal accounting policies and procedures that include multiple levels of review.

 

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Limitations on Effectiveness of Controls and Procedures

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.

This report does not include an attestation report of the company’s registered public accounting firm regarding internal control over financial reporting. Identified in connection with the evaluation required by paragraph (d) of Rule 240.13a-15 or Rule 240.15d-15 of this chapter that occurred during the registrant’s last fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting.

PART II – OTHER INFORMATION

Item 1. Legal Proceedings.

We were not subject to any legal proceedings during the three month periods ended October 31, 2014 or 2013 and, to the best of our knowledge, no legal proceedings are pending or threatened.

Item 1A. Risk Factors.

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

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

No equity securities were sold during the three month periods ended October 31, 2014 or 2013.

Item 3. Defaults Upon Senior Securities.

No senior securities were issued or outstanding during the three month periods ended October 31, 2014 or 2013.

Item 4. Mine Safety Disclosures

Not applicable to our Company.

Item 5. Other Information.

None

 

Item 6. Exhibits.

a. Exhibits

 

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SIGNATURES

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