Hartford Great Health Corp. - Quarter Report: 2018 April (Form 10-Q)

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

(Mark One)

FORM 10-Q

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

For the quarterly period ended: April 30, 2018

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

For the transition period from ____   to ________

Commission File Number: 000-54439

(Exact Name of Registrant as Specified in its Charter)

(Address of Principal Executive Offices) (Zip Code)

Registrant's telephone number including area code: (805) 272-0874

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 and 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).

Yes  ☒            No ☐

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

Large accelerated filer   ☐                                                                                             Accelerated filer  ☐

Non-accelerated filer  ☐                                                                                               Smaller reporting company  ☒

 

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

State the number of shares outstanding of each of the issuer's classes of common equity, as of the latest practicable date: 3,018,000 shares of common stock outstanding as of June 10, 2018.

 

Index

 

PHOTOAMIGO,  INC.

 CONDENSED BALANCE SHEETS

 

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

 

PHOTOAMIGO, INC.

 CONDENSED STATEMENTS OF OPERATIONS

(unaudited)

* denotes a loss of less than $(0.01) per share.

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

 

PHOTOAMIGO, INC.

 CONDENSED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY (DEFICIT)

 (unaudited)

 

 

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

 

 

PHOTOAMIGO, INC.

CONDENSED STATEMENTS OF CASH FLOWS

 (unaudited)

 

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

PHOTOAMIGO, INC.

 NOTES TO CONDENSED FINANCIAL STATEMENTS

For the nine month periods ended April 30, 2018 and 2017

 (unaudited)

1.	Nature of Operations and Summary of Significant Accounting Policies

Nature of Operations

PhotoAmigo, Inc. ("the Company" or "PhotoAmigo") was organized under the laws of the State of Nevada on April 2, 2008. It plans to develop photographic sharing and networking through its website PhotoAmigo.com.

Summary of Significant Accounting Policies

Interim Financial Information: The interim financial statements included herein have been prepared by the Company, without audit, pursuant to the rules and regulations of the Securities and Exchange Commission ("SEC") as promulgated in Item 210 of Regulation S-X. Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America ("US GAAP") have been condensed or omitted pursuant to such SEC rules and regulations. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation of financial position as of April 30, 2018, results of operations, changes in stockholders' equity (deficit) and cash flows for the three and nine month periods ended April 30, 2018 and 2017, as applicable, have been made. The results for these interim periods are not necessarily indicative of the results for the entire year. The accompanying financial statements should be read in conjunction with the financial statements and the notes thereto included in the Company's Form 10-K.

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

Cash and Cash Equivalents: The majority of cash is maintained with a major financial institution in the United States.   Generally, these deposits may be redeemed on demand and, therefore, bear minimal risk.  The Company considers all highly liquid investments purchased with an original maturity of three months or less to be cash equivalents.

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. 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.

Revenue Recognition: PhotoAmigo has not commenced operations, is in its development stage, and has not yet generated any revenues from operations. Revenues are expected to be derived principally from subscriptions to our website.

Income (Loss) Per Share: Basic earnings per share includes no dilution and is computed by dividing net income (or loss) by the weighted- average number of shares outstanding during the period. Diluted earnings per share reflect the potential dilution of securities that could share in the earnings of the Company, assuming the issuance of an equivalent number of common shares pursuant to options, warrants, or convertible debt arrangements. Diluted earnings per share is not shown for periods in which the Company incurs a loss because it would be anti-dilutive. Similarly, potential common stock equivalents are not included in the calculation if the effect would be anti-dilutive. No potentially dilutive debt or equity securities were issued or outstanding during the three and nine month periods ended April 30, 2018 or 2017.

Recent Accounting Pronouncements: The Company has reviewed all the recently issued, but not yet effective, accounting pronouncements and does not believe any of these pronouncements will have a material impact on the Company.

 

2.	Going Concern

The accompanying financial statements were prepared on a going concern basis, which contemplates the realization of assets and the satisfaction of obligations in the normal course of business. However, PhotoAmigo has incurred losses since inception (April 2, 2008), resulting in an accumulated deficit of $326,465 as of April 30, 2018. These conditions raise substantial doubt about the ability of PhotoAmigo 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, and ultimately achieving profitable operations. Management cannot provide assurance that PhotoAmigo 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 PhotoAmigo to continue as a going concern.

3.	Related Party Transactions

 

During the nine months ended April 30, 2018, the Company borrowed $17,700 from four shareholders to fund the Company's ongoing activities. The shareholders have not received any equity for these loans and these loans are repayable by the Company. Simple interest accrues on these notes 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 $171 for the three months and $428 for the nine months ended April 30, 2018 related to these notes. This compares to the $18,280 borrowed from four shareholders: $5,000 from two and $2,500 from a third and $5,780 from a fourth shareholder during the first nine months of 2017. During the same time frame in 2017 the Company accrued an interest expense of $79 for the three months and $139 for the nine months.

Office space is provided to PhotoAmigo at no additional cost by the sole executive officer. No provision for these costs has been included in these financial statements as the amounts are not material.

4.	Income Taxes

PhotoAmigo's deferred tax assets, valuation allowance, and change in valuation allowance are as follows:

 

 

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

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.

5.  Stockholders' 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 2, 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 nine months ended April 30, 2018 or 2017.

There were 3,018,000 shares of common stock issued and outstanding at June 10, 2018.

 

6.    Subsequent Events

 

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

This discussion updates our business plan for the nine month period ending April 30, 2018. It also analyzes our financial condition at April 30, 2018, and compares it to our financial condition at July 31, 2017. This discussion and analysis should be read in conjunction with our audited financial statements for the year ended July 31, 2017, including footnotes, contained in our Annual Report on Form 10-K, and with the unaudited financial statements for the interim period ended April 30, 2018, including footnotes, which are included in this quarterly report.

Overview

The Company 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, 2017 and July 31, 2016 includes a "going concern" explanatory paragraph that describes substantial doubt about the Company's ability to continue as a going concern. Management's plans in regard to the factors prompting the explanatory paragraph are discussed in the financial statements, including footnotes thereto.

Plan of Operation

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 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.

 

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

Liquidity and Capital Resources

As of April 30, 2018, we had a working capital deficit of $(40,334), comprised of $2,901 in cash and $43,235 of current liabilities.  This represents a decrease in the working capital of $18,654 from the working capital deficit balance of  $(21,680) reported as of July 31, 2017 which comprised cash of $1,928 and current liabilities, comprising current liabilities of $23,608.

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 April 30, 2018, we have no plans or commitments to acquire capital assets.

 

Results of Operations – Three Months Ended April 30, 2018 Compared to the Three Months Ended April 30, 2017.

Revenue

We recognized no revenue in the three months ended April 30, 2018 or 2017 as our limited operations have not generated revenue yet.

Operating Expenses

 

Operating expenses decreased to $5,193 for the three months ended April 30, 2018, compared to $5,559 during the comparable period of 2017. During the three months ended April 30, 2018, website development costs increased $328, legal and accounting fees decreased by $1,306, and general and administrative expenses decreased by $360, while investor relations increased by $1,140, depreciation expenses decreased by $168. Consistent with our current need to conserve capital resources, we try to reduce our marketing expenses, and certain general and administrative expenses but do not always succeed. 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 April 30, 2018, we recorded a net loss of $5,364 compared to a net loss for the corresponding period of 2017 of $5,638 or a decrease in losses of $274 due to the factors discussed above.

Results of Operations – Nine Months Ended April 30, 2018 Compared to the Nine Months Ended April 30, 2017.

Revenue

We recognized no revenue in the nine months ended April 30, 2018 or 2017.

Operating Expenses

Operating expenses increased to $18,756 for the nine months ended April 30, 2018, compared to $14,912 during the comparable period of 2017. During the nine months ended April 30, 2018, website development costs increased by $2,187, legal and accounting fees increased by $1,756, general and administrative expenses decreased $214, while investor relations increased by $283 compared to the nine months ended April 30, 2017 and depreciation decreased by $168. Consistent with our current need to conserve capital resources, we try to reduce our marketing expenses, and certain general and administrative expenses but do not always succeed. 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 nine months ended April 30, 2018, we recorded a net loss of $19,184 compared to a net loss for the corresponding period of 2017 of $15,051 or an increase in losses of $4,133 due to the factors discussed above.

 

 

Cash Flows – Nine Months Ended April 30, 2018 Compared to the Nine Months Ended April 30, 2017.

Operating Activities

During the nine months ended April 30, 2018 we used $16,727 in operating activities compared to the $16,476 used in the operations during the nine months ended April 30, 2017. During the nine months ended April 30, 2018, we recorded losses of $19,184, incurred non cash depreciation expense of $530 and accounts payable increased by $1,499. Additionally the increase in interest payable of $428 is from accrued rather than paid interest and is a non-cash using item. By comparison, during the nine months ended April 30, 2017, we recorded losses of $15,051, incurred non-cash depreciation of $698, and accounts payable decreased by $2,262 while accrued interest increased by $139.

Investing activities

During the nine months ended April 30, 2018 and April 30, 2017 we did not purchase any capital assets, we neither used, nor generated funds from investing activities.

Financing activities

 

During the nine months ended April 30, 2018, four shareholders loaned the Company $17,700 to finance the Company's ongoing activities. The shareholders did not receive any equity for these loans and they are repayable by, the company. Accordingly, these funds have been accounted for as loans. For the period ending April 30, 2017 we received $18,280 from loans from four 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 changes in our critical accounting policies since our most recent audit dated July 31, 2017.

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.

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

 

 

 

 

 

PART II – OTHER INFORMATION

Item 1. Legal Proceedings.

The following paragraph describes a pending change of control for PhotoAmigo, Inc. as noted in the SEC Schedule 14F – 1 filing dated June 1, 2018:

 

CHANGE OF CONTROL; FUTURE DIRECTORS AND EXECUTIVE OFFICERS

Pursuant to the terms of the Purchase Agreement, in connection with the closing of the transactions contemplated by the Purchase Agreement and at least 10 days after the mailing of this Information Statement (the “New Board Effective Date”), the sole director and officer of the Company will resign and three new directors selected by the Purchaser will be appointed. As a result of the closing of the transaction contemplated by the Purchase Agreement, there will be a change of control of the Company. The Company’s Board of Directors will consist of the following persons as of the New Board Effective Date:

Xin Dong. Mr. Dong has served as the Executive Director and General Manager of Shanghai Huitong Health Management Company, a senior care and traditional health management company, in China since September 2017. From July 2016 through August 2017, Mr. Dong acted as the Vice President and General Manager of Shanghai Huicai Financial Information Service Co., Ltd., a financial service and small loan company, in China. Mr. Dong has also served as the General Manager of Shenzhen Maoli International Trading Co., Ltd., an international trading company in Shenzhen, China, from April 2012 through June 2016, and as a Project Manager and Market Representative at Nanjing Hongyuan Electronic Technology Company, an electronics manufacturing company, from July 2007 through March 2012. Mr. Dong holds a Masters in International Finance and Trade from Shanghai Jiaotong University and a degree in Computer Science from Jiangsu University.

Sheng-Yih Chang. Mr. Chang has served as the General Manager at Hartford Hangzhou Hotel, a commercial hotel in Hangzhou, China, since March 2018. Mr. Chang served as a Product Manager at Jowett Group, a textile manufacturing company in the USA, from November 2015 through September 2017, as an Operational Manager and General Manager at A-Concepts Designs, an interior designing company in the USA, from January 2004 through October 2015, as a General Manager at Long Arch International, a carving crafts supplier in the USA, from December 2000 through December 2003, as a Sales Manager at EZ Wholesale, a grocery wholesaler in the USA, from July 1998 through November 2000, and as a Technician at Richcom Computer Corporation, a computer service provider in China, from July 1996 through November 1997. Mr. Chang studied electrical engineering at the University of British Columbia and holds a Bachelor of Science in Electrical Engineering from California State University, Northridge.

Xueying Song. Mr. Song has served as the Vice President of Hangzhou Haofu Health Management Company, a medical device provider and health product manufacturer in China, since 2017. Mr. Song served as the Vice President of Financing Operations at China Fang Group Investment Company, an investment company focus on real estate development in China, from 2016 through 2017, as the Deputy Chief Executive Officer of China Fang Group Assets Corporation, an assets management company in China, from 2013 through 2016, as a Vice President at Suwu Futures Group Corporation, a company that focus on futures investment and management in China, from 2010 through 2013, as the Deputy Manager of the Asset Management Department at Hongye Futures Group Corporation, a futures investment and management company in China, from 2008 through 2010, as a Regional Director at Huatai Securities Co., Ltd., a security company in China, from 2006 through 2008, and as a Business Manager at Xintai Securities, a security company in China, from 2001 through 2006. Mr. Song holds a Bachelor of Science and Management Degree in Civil Engineering from Southeast University in China and a Law Degree from Nanjing University of Science and Technology.

 

All directors will hold office until the next annual meeting of the Company’s stockholders or until their successors have been elected and qualified or appointed, unless sooner displaced.

 

 

 

 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 nine month period ended April 30, 2018 or 2017.

Item 3. Defaults Upon Senior Securities.

No senior securities were issued or outstanding during the nine month periods ended April 30, 2018 or 2017.

Item 4. Mine Safety Disclosures

Not applicable to our Company.

Item 5. Other Information.

None

Item 6. Exhibits.

a. Exhibits

101      Interactive Data Files

 

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.